Tuesday, July 31, 2007

Prince Rupert's LNG project shelved in favour of Texada Island plans


The planned construction of an LNG facility at Ridley Island has been cancelled in favour of a larger development on Texada Island. The Globe and Mail featured the latest developments from WestPac LNG Corp. of Calgary.

The cancellation of the LNG terminal marks the second time that a proposed terminal has been scuttled for the North Coast, back in the eighties Dome Petroleum had proposed a terminal for the Grassy point area of Port Simpson, but market forces at the time scuttled dome before it could launch its plans.

WestPac had originally set their sights on Prince Rupert for their liquefied natural gas import terminal , but apparently began to have second thoughts over the feasibility of the north coast design.

From there it seems they just decided to go elsewhere, now planning on bringing the big LNG ships to Texada Island , where they will also construct a new gas-fired 600-megawatt power plant. How that will be greeted by residents of the sunshine coast and gulf islands remains to be seen.

WestPac LNG president Mark Butler suggested that the Prince Rupert project might be revived some day as a satellite terminal, should the need arise, however for now, the development of the project in Prince Rupert would appear to be on hold for what may be a very long time.

Interestingly enough, he is quoted as saying that he told local officials of his plans as far back as February, though there doesn't seem to have been any local announcement about the potential abandonment of the project locally at the time.

"Mr. Butler held out the hope the Prince Rupert project might be revived some day as a satellite terminal, adding stakeholders in the city were informed of WestPac's changed plans in February."

The cancellation of the Rupert project, comes as plans to develop a similar project for Kitimat continue on towards construction. This archive piece in the Vancouver Sun, quotes city and economic development officials as still suggesting as late as June, that there was room for both projects.

Prince Rupert had trumpeted that the project would provide for 300 construction jobs and 30 full time jobs at the terminal upon its completion.

As it turns out, there may only be room for one terminal, and the construction and operational jobs will be in Kitimat.


B.C. LNG plant now slated for Texada Island
Canadian Press
Globe and Mail
July 31, 2007 at 4:06 PM EDT


VANCOUVER — A liquefied natural gas import terminal planned for the port of Prince Rupert has been cancelled in favour of a much larger project to be built further down the B.C. coast.
The new $2-billion project proposed by privately held WestPac LNG Corp. of Calgary includes an LNG import terminal and a new gas-fired 600-megawatt power plant on Texada Island.

WestPac LNG president Mark Butler said Tuesday the new project makes sense because it provides a secure supply of natural gas, helps meet the B.C. government's goal of electricity self-sufficiency and taps into existing nearby gas pipeline and electric transmission lines supplying Vancouver Island.

“We believe that the project which would combine both a liquefied natural gas receipt terminal with a power facility offers a number of benefits to the people of British Columbia,” he said.
The new project has forced WestPac to suspend plans for a $300-million import terminal at Ridley Island, in the port of Prince Rupert, Mr. Butler said.

He blamed the cancellation on soaring materials costs and the Prince Rupert project's now-unnecessary role as a primary terminal to serve future satellite LNG facilities on the coast.
Mr. Butler held out the hope the Prince Rupert project might be revived some day as a satellite terminal, adding stakeholders in the city were informed of WestPac's changed plans in February.

Texada Island, in Georgia Strait midway between Powell River on the mainland and Comox on Vancouver Island, was also chosen because of its relative remoteness from major urban centres.
Unlike many of the pastoral Gulf Islands, Mr. Butler said Texada, which has about 1,200 residents, has been an “industrial island” since before Confederation, home to quarries.

The WestPac complex, slated to open in 2013 if it wins regulatory approval, would take Asian LNG, regasify it and use it to fuel the power plant.

Additional gas could also be fed into the existing pipeline to supply Vancouver Island, Powell River and, with the flow reversed, the Vancouver area, Mr. Butler said. The approach doubles the existing line's capacity, he said.

“By optimizing the use of this line we have the ability to reduce the tolls that are charged to the citizens of British Columbia,” he said, adding this would effectively cut the cost of gas to consumers.

The power plant would help reduce B.C.'s growing electricity deficit, in line with the government's goal of self-sufficiency by 2016, Mr. Butler said.

It would provide firm electrical capacity to back up green-power projects now on the drawing board, mostly wind and water-powered plants, he said.

Former B.C. attorney general Geoff Plant, who sits on the WestPac board of directors, said the province's forecast demand for electricity outstrips the capacity for traditional types of power facilities to supply it.

“It won't be good enough to rely on the weather,” he said. “There will be a continuing and growing need for always-available dispatchable energy to be there when demand is high and when the wind isn't blowing , when the sun isn't shining and the rivers aren't full.”

The new plant would also help with plans by B.C. Hydro to replace the inefficient, dirtier Burrard thermal plant near Vancouver by 2014, he added.

Co-locating the LNG facility and power plant optimizes the energy efficiencies of both, Mr. Butler went on. Heat to regasify the LNG comes from the power plant and cooling air from the chilled gas increase electric turbine efficiency, reducing greenhouse gases.

The project would create about 300 jobs during construction and 80 jobs once the complex is in operation, Mr. Butler said.
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ARCHIVE: Fight for terminal
Michael Kane
Vancouver Sun
Tuesday, July 31, 2007
From Wednesday, June 7, 2006

Kitimat LNG Inc. has won a B.C. environmental assessment certificate that makes it the front -runner to build the first liquefied natural gas terminal on the North American West Coast.

The announcement came Tuesday as WestPac LNG Corp. formally began its proposal process for a $350-million LNG terminal near Prince Rupert.

Analysts say there is room for both terminals because natural gas imports will become increasingly necessary to meet North American demand.

The environmental certificate for Kitimat includes 243 commitments ranging from emission standards to protection for fish and wildlife, including the coastal tailed frog.

"It's a key milestone for our company and it really provides certainty for our project," Rosemary Boulton, president of Calgary-based Kitimat LNG, said in an interview.

"It's no longer if we are going to be built, it's when. It allows us to go out to the suppliers in the Pacific Basin ahead of 12 or 13 other projects proposed on the West Coast. It gives us first mover advantage."

Subject to federal environmental approval, which could come within four to six weeks, construction at Bish Cove, 14 km south of Kitimat, is due to begin in the fall and be completed in 2009.

The $500-million project is expected to create 700 construction jobs and 50 permanent jobs. In addition to a terminal to receive insulated containers carrying gas cooled to a liquid state by suppliers such as Australia, Malaysia and Indonesia, it will provide storage and re-gasification facilities, a three-kilometre access road and a 14-kilometre pipeline connection to the North American natural gas grid.

Boulton sees a local market, a regional market and a continental market for the terminal which will initially generate about 600 million cubic feet of natural gas daily, some of which could flow south into the Western States. Although it seems counterintuitive, some of the gas is likely to end up in northern Alberta where great quantities are used in oil sands processing.

In contrast, Calgary-based WestPac LNG is proposing to build a transshipment terminal on Ridley Island, an industrial park 11 km outside of Prince Rupert, to initially convert imports into about 350 million cubic feet of natural gas per day for the Northwest Coast, Vancouver Island and the Lower Mainland. It will be shipped out by barge, truck and rail, as well as linking to existing pipelines at the construction site. The project is expected to create at least 300 jobs during construction and about 30 full-time jobs once operational in 2011.

"There is room for both projects because they are based on different business plans and are targeting different end users," said Jim Rushton, manager of the Prince Rupert and Port Edward Economic Development Corp.

"Furthermore, by the time the projects come on line, offshore supplies of natural gas will be required to replace the decline in traditional supply currently satisfying North America's domestic need."

Mark Butler, president of WestPac, said that not only does the market have enough capacity to absorb gas from both projects but the Prince Rupert facility is designed to be expanded as demand grows.

Prince Rupert Mayor Herb Pond welcomed the WestPac proposal, saying a secure supply of natural gas will remove bottlenecks that have constrained growth in the past.
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