Proposed LNG operation to be a shipment hub

If the LNG plant proposed for Ridley Island ever gets up and running it won’t be relying on a pipeline to send its product off to its customers. The WestPac LNG project will not only tap into the existing pipeline system currently in place, but also rely on rail cars, truck transportation and smaller coastal barges and ships to move its product around the coast.

The transportation options were explained in a front page story in the Daily News on Thursday.

‘NO NEED FOR NEW LNG PIPELINE’
LNG facility to be built on Ridley will distribute by truck and rail
By Leanne Ritchie
The Daily News
Thursday, October 19, 2006
Page One

The WestPac LNG (Liquefied Natural Gas) proponents plan to feed the natural gas market in North America by trucks, ships and the existing pipeline system, said Stu Leeson, a vice-president with the company.

Speaking at the Northwest Corridor Development Corporation Conference, Leeson said there is a large coming demand for natural gas and their Prince Rupert project will help meet that demand.

“There is a tremendous amount of natural gas available in isolated areas where the demand for natural gas is not great. A lot of this gas was found when producers were looking for oil,” said Leeson.

“Our plan is to import LNG from various sources around the Asia Pacific region.”

WestPac LNG Corporation has proposed a $350 million dollar LNG receiving and transshipment terminal on Ridley Island. The project will include a new maritime berthing facility and up to four onshore LNG storage tanks. When fully developed, the facility will have the capacity to transship the natural gas equivalent of up to one billion cubic feet per day of LNG.

However, unlike the Kitimat LNG project, WestPac has no plans to build new pipelines to get natural gas to market.

Once LNG hits Prince Rupert, our plans are to transship it using smaller LNG cargos to markets along the West Coast,” he said.

This could occur using trucks, rail cars, barges and smaller ships.

In addition, they have located their project near existing pipeline systems.

“What we are trying to do is come up with a project that does not require anymore pipeline infrastructure.”

LNG is natural gas that has been liquefied by cooling it- 162 degrees Celsius. It’s easier to transport as a liquid because it significantly reduces its volume.

“What that allows you t do is transport it by ship very efficiently,” he said. For example, a standard LNG carrier carries 300 billion cubic feet of natural gas.

LNG is expected to become a crucial part of the North America natural gas supply in coming years. Because of a shortage of natural gas supplies in North America, prices are already spiraling upwards, he said.

“If you project out demand over the next 15 years, you see LNG has to become a critical part of our natural gas supply,” he said.

By 2025 LNG could provide as much as 12 per cent of North American gas supply.

In addition, some of the LNG comes in with a fairly high content of propanes and butanes.

“Those can be extracted and sold as a separate product,” he said.

Stu Leeson joined WestPac in August and he has worked in international LNG markets with some of the largest companies in the industry.

The Prince Rupert LNG terminal will create at least 300 jobs during construction and about 30 full time jobs once it becomes operational in 2011.