The selling of the concept and merits of an LNG Terminal for Prince Rupert has begun, as the President of WestPac LNG, Mark Butler gave a presentation to the Prince Rupert Chamber of Commerce this week.
Mindful that a project such as this tends to find a lot of detractors (hence why there are not very many terminals dotting the shorelines of North America), Butler accentuated the positives as they say, as he pointed to potential economic development once the project is up and running.
Suggesting that the current pipeline from Terrace reduces our chances for large scale economic development, it was the prospect of economic potential with a terminal on our shores that was highlighted in his presentation. The impression made was that with the terminal in place we could more than pick up the pace of development for the North Coast
The Daily covered the speech and provided details in its Thursday edition, including a piece from the Canwest news service about the growing potential for importing natural gas into the county. Both are provided for your research purposes below.
LNG TERMINAL MAY TRIGGER ADDITIONAL GROWTH
By Leanne Ritchie
The Daily News
Thursday, June 22, 2006
Pages One and Three
WestPac Terminals hopes that building a Liquefied Natural Gas (LNG) receiving terminal in the industrial area on Ridley Island will act as a catalyst for other types of industrial development on the North Coast.
A secure gas supply for industry is a benefit that will come from the proposed $350 million development, Mark Butler, president of WestPac LNG, said at the Chamber of Commerce yesterday.
“You are currently constrained because of the size of the gas pipeline (from Terrace) but you will be able to attract other industries because of a stable supply,” said Butler.
WestPac is proposing to build an LNG receiving terminal on a 250 acre parcel of land on Ridley Terminals and are working with the Port of Prince Rupert on the first stages of an environmental assessment. They hope to employ 30 people when the terminal begins operations in 2011.
Butler explained that North America currently uses more natural gas than it produces and that situation is likely to get worse.
“LNG importation will help us to fill this gap,” he said.
The terminal hopes to receive LNG from Malaysia, the Middle East, the Falklands and Australia and then sell it into the North American market.
While there are more than 50 terminals proposed for the coasts of North America, many of those proposed for the West Coast of the United States are facing opposition because they are proposed for highly populated areas or will require the use of offshore platforms.
”Appropriate sitting of these terminals has proven to be a problem,” said Butler.
It will take 15 to 16 terminals to meet the needs of North America in the future and the WestPac proposal has a higher chance of success because of its chose location on Ridley Island, he said. He said the site is an industrial where the company has been able to secure a large footprint for the storage tanks and a tanker berth.
In addition, there is room for other forms of industrial development on Ridley Island and a ready, secure supply of gas will be attractive to developers, he pointed out.
“Ridley puts us close to a point that is looking for other industry,” he said.
He added WestPac would love nothing more than to see a co-generation plant – using natural gas to produce electricity – develop on Ridley Island.
Another benefit offered by the proposed site on Ridley Island is that it is closer to the gas production areas than other parts of North America.
“The distance turns into money for shippers,” he said.
It is unlikely, the terminal will mean any significant decrease for residential customers in the Northwest he cautioned, because imported gas sold into the North American market place is subject to the North American price.
Pacific Northern Gas, which supplies gas to homes in the area, buys its gas and sells it to the consumer at the market coast. It makes its profits on the delivery charge.
So while adding more gas supply into the market through the development of 15 or 16 terminals around North America could lower the overall market cost, it is unlikely that a price reduction would be attributed to a single terminal.
**(For more on the North American Natural Gas market, see Page Seven)**
LNG is natural gas that has been chilled to 250 degree Fahrenheit. At that temperature it condenses to a colourless odourless liquid, like water. It holds in that state without pressure as long as it stays cold.
It was developed by a butcher in Chicago in the early 1940’s. The butcher was looking for a cheaper way to chill meat.
Over the last 60 years some 33,000 shipments have been moved around the globe and at no time has there been a shipping facility said Butler.
“It is a way to store a tremendous amount of energy in a concentrated form.”
The WestPac operation is proposing a tanker shipment every 10 days.
Each ship would be about the length of a cruise ship and would carry 150,000 cubic metres of LNG, or enough gas to supply the needs of Prince Rupert for 330 days.
** Story referenced in Daily News article from page seven
Growing demand points to natural gas imports
Scott Simpson
CanWest News Service; Vancouver Sun
Thursday, June 22, 2006
VANCOUVER - North America's expanding appetite for natural gas will soon force utilities to take the unprecedented step of importing gas from other continents, according to an association that monitors energy issues in the Pacific Northwest.
The present gas supply situation is ``so fragile'' according to Northwest Gas Association executive director Dan Kirschner, that a heat wave last week in the northeastern U.S. pushed up the spot price of gas 20 per cent in a single day as utilities boosted electricity production to meet a surge in demand for air conditioning.
Kirschner said in an interview this week that adding new sources of supply including liquefied natural gas, or LNG, will help dampen price volatility for consumers.
U.S. gas market analysts have previously warned that by 2010, imports of LNG will be necessary to maintaining stable prices for North American gas consumers whose demand for gas is expected to grow 30 per cent by 2025.
Traditional high-volume producers such as Alberta are already experiencing declines in the amount of gas flowing from their aging conventional gas fields.
Substitute fuels such as coalbed methane are increasingly replacing conventional gas.
But the association says in a recent White Paper that imported LNG must also be in the mix because the Northwest is increasingly drawn into a continent-wide gas market.
New continent-spanning pipeline proposals pulling gas to the eastern side of North America will expose consumers in B.C., Washington, Oregon and Idaho to higher prices and market pressures that are already in play in more populous eastern U.S. states and Eastern Canada.
``The North American appetite for (gas) is growing more quickly than our ability to produce it'' the association said. ``New production capability across North America is struggling to keep pace with growing continental demand.''
There is some urgency attached to the situation.
The association said it takes ``years'' to develop new gas supply and delivery facilities and ``efforts to cultivate new non-conventional sources have encountered hurdles and time delays.''
The Northwest Gas Association is an alliance of gas utilities including B.C.'s Terasen Gas.
LNG landing terminals have been proposed at about 30 locations around North America including projects in Kitimat and Prince Rupert, B.C. where liquefied gas coming from Russia, Asia and the Middle East would be converted back into a gas and dispatched around North America via an expanding continental pipeline network.
ssimpson@png.canwest.com
Vancouver Sun
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