British Columbia LNG terminals

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Global oil and gas companies have proposed nearly two dozen liquefied natural gas (LNG) export facilities for the coast of British Columbia. Project backers hope to supply customers in Asia with fracked methane extracted from the Montney Formation in northeastern British Columbia and northwestern Alberta to customers in Asia. The BC Liberal party had made LNG exports a cornerstone of its economic policy in 2013, promising that revenue from the LNG industry would be placed into a "prosperity fund" that would eliminate the provincial debt.[1] However, a crash in global LNG markets in 2014 slowed development of BC's nascent LNG export industry. As of mid-2017, project backers had made a final investment decision only on the relatively small-scale Woodfibre LNG in Squamish, BC.

LNG Proposals on the Salish Sea

Tilbury LNG expansion and Wespac jetty

Two projects are underway at FortisBC’s 46-year-old Tilbury LNG plant at Delta, BC, just south of Vancouver. FortisBC is expanding the plant’s production capacity, and Wespac hopes to build a new marine jetty adjacent to the plant. FortisBC began the $400 million production capacity expansion in 2014, adding liquefaction equipment and a second LNG storage tank. Existing Fortis BC pipelines will continue to feed gas to the facility.

A subsidiary of US-based WesPac Midstream is undertaking the jetty project, which would allow LNG carriers to load LNG for transport to “regional and offshore markets” and to fuel marine vessels such as BC Ferries. The project backers aim to sell 3 million metric tons per year from the facility. FortisBC had inked an 800,000-metric-ton-per-year LNG export agreement with Hawaiian Electric, but the deal fell through in mid-2016, likely affecting the finances of the jetty project. FortisBC is now seeking other export partners.[2]

Malahat LNG and Sarita LNG

Vancouver-based Steelhead LNG has announced plans for two LNG projects on Vancouver Island: Malahat LNG, located on Malahat Nation-owned territory north of Victoria, and Sarita LNG, on Huu-ay-aht First Nations lands near Port Alberni. Steelhead has reached a lease agreement with the Malahat Nation and an exploratory agreement with the Huu-ay-aht First Nations.

Canada’s National Energy Board (NEB) granted Steelhead export licenses for 6 million metric tons per year from Malahat LNG and 24 million metric tons per year from Sarita LNG. The Malahat facility would rely on natural gas delivered by the Island Gas Connector, an 81-mile pipeline proposed by Williams Pipeline Northwest. The new pipeline would begin in Washington State at Northwest Pipeline’s Canadian gas interconnect at Sumas, run along the floor of the Salish Sea for nearly 50 miles, and connect to the proposed Malahat LNG facility. The pipeline would traverse the treaty-protected fishing areas of several tribes, including the Lummi Nation. Steelhead has not announced pipeline plans for the Sarita Bay project but speculates that it could use a combination of existing and new pipelines to transport gas supply to that facility. Steelhead intends to make an investment decision on Malahat in 2018.[2]

Discovery LNG

Discovery LNG was proposed by an Alberta subsidiary of Texas-based Quicksilver Resources, which went bankrupt in early 2015. Now calling itself Rockyview Resources, the project backer proposes to build a 20-million-metric-ton-per-year LNG facility on the north side of Campbell River. Rockyview has not yet identified a pipeline route to the facility but says it would require about 300 kilometers of new pipeline to transport gas from the lower mainland to the Campbell River site. Rockyview has lowered its expectations on how quickly the project will move, pushing out the facility’s operations date goal to 2030. Rockyview is still seeking joint venture partners to get the project off the ground. The project backer told the magazine Douglas in 2014, “The project is worth more than the whole company. But there are interested partners out there.”[2]

Woodfibre LNG

Woodfibre LNG is proposed for the shores of Howe Sound, southwest of Squamish, BC. The National Energy Board (NEB) granted Woodfibre a 25-year export license for 2.1 million metric tons per year, and in October 2016, the company applied for a 40-year license to export 2.9 million metric tons per year. The LNG plant would obtain its gas supplies from the Eagle Mountain-Woodfibre Gas Pipeline (EGP) Project, a proposed expansion of a 47-kilometer portion of existing FortisBC pipeline. In 2016, Guangzhou Gas Group agreed to buy one million metric tons of the plant’s capacity for 25 years, starting in 2020, but the remaining quantity still lacks a buyer. Last November, Woodfibre LNG’s parent company, Pacific Oil & Gas Limited (which is part of the Singapore-based RGE Group), authorized funds to allow the project to proceed. The project’s finances hinge on subsidized electricity provided by BC Hydro, the provincial utility.[2]

LNG Proposals near Kitimat, BC

Kitimat LNG

Kitimat LNG is a joint venture between oil giant Chevron and Australian oil and gas corporation Woodside Energy. Like Shell and Exxon, Chevron is one of the top players in the fracked natural gas market. Kitimat LNG has been in development since 2004, before the BC LNG gold rush, under the development name KM LNG Operating Partnership. The ownership structure has changed several times since the project began: the partnership was originally led by the Canadian arm of Texas-based Apache Corporation. The planned facility would be located next door to another proposed LNG project at Bish Cove on the Douglas Channel, on land leased from the Haisla Nation. Chevron’s proposed 480-kilometer Pacific Trail Pipeline would deliver gas to the facility from the Liard and Horn River basins. 46 Chevron and Woodside hope to export 10 million metric tons of LNG per year from the liquefaction plant.[2]

Cedar LNG

Backed by the Haisla Nation, the still-speculative Cedar LNG project would build several floating LNG plants at Bish Cove on the northern Douglas Channel, close to Kitimaat Village. The project backers have submitted applications for three LNG terminals at this location: Cedar 1, Cedar 2, and Cedar 3. The NEB granted an export license for 6.4 million metric tons per year from Cedar 1, but deemed the export license applications for Cedar 2 and Cedar 3 incomplete. Project backers have not settled on a pipeline route to supply the project but say they have entered the “advanced stages of negotiating and drafting definitive agreements with the major gas producers and pipeline transmission companies.” If the project does not pan out, the Haisla will still have some stake in LNG development through their benefits agreement with the backers of Kitimat LNG.[2]

Triton LNG

Altagas originally planned two LNG facilities for Kitimat: Triton LNG and Douglas Channel LNG. In early 2016, however, Altagas halted all further development on Douglas Channel LNG, and the company has also put Triton on the back burner. Triton LNG’s joint venture partner, Japanese oil company Idemitsu Kosan, “suspended all efforts” on the project in mid-2016. If built, Triton would probably be located on the same lot slated for Douglas Channel LNG and would link up to the proposed expansion of Altagas’s Pacific Northern Gas pipeline. If Triton does not move forward, Altagas will still have some hope for exporting a natural gas product, as the company is planning to build a propane export facility on Ridley Island near Prince Rupert.[2]

LNG Canada

Shell is one of the biggest players in the global LNG market, so it’s no surprise that the corporation hoped to expand its holdings with a major facility in BC9 Other big names attached to the LNG Canada project include PetroChina, China’s biggest oil producer; South Korea’s KOGAS, one of the world’s largest LNG importers; and Mitsubishi, which invests in LNG production in “host countries” and acts as an import agent for Japanese customers. Even with such deep pockets at the table, the companies announced in July 2016 that they would indefinitely delay a final investment decision on the project. If the proposal resumes, the backers hope to produce 24 million metric tons of LNG per year, using gas from the proposed 670-kilometer Coastal GasLink pipeline leading from Dawson Creek in northeastern BC.[2]

LNG Proposals at Prince Rupert

Pacific NorthWest LNG

Six major global oil companies are backing the Pacific NorthWest LNG project. Malaysian oil company Petronas owns the majority stake. The minority stakeholders in the project include Japanese oil and gas company JAPEX; Chinese oil and chemical company Sinopec; China Huadian Corporation, one of China’s largest state-owned power producers; Indian Oil, India’s largest corporation and owner of half of the country’s oil refineries; and Petroleum Brunei, the national oil company of Brunei. Each of the minority stakeholders has pledged to buy LNG from the facility, but the project still lacks buyers for all of the planned 18 million metric tons of LNG it would produce annually.[2]

Sited at Lelu Island, south of Port Edward, BC, Pacific NorthWest LNG would be supplied gas by the Prince Rupert Gas Transmission Project, a proposed 900-kilometer pipeline. After the Canadian federal government approved the project in September 2016, the backers delayed the final investment decision until summer 2017. Though the Nisga’a Lisims government signed economic benefits agreements with both the pipeline backer and the province, a coalition of indigenous leaders, politicians, scientists, fishermen, and others has signed a declaration to protect Lelu Island and the Skeena River, BC’s second-largest salmon-bearing waterway, from industrial development such as the Pacific NorthWest LNG facility.[2]

Prince Rupert LNG

The Prince Rupert LNG project was backed by Shell. The oil corporation acquired original project backer BG Group in 2015. BG Group had put the project on hold in 2014, and now it appears to be a very low priority for Shell. The proposed location is on Ridley Island, about 20 kilometers from Prince Rupert. The plant would produce 21 million metric tons of LNG per year, drawing gas supplies from the proposed Westcoast Connector Gas Transmission Project, which would be built and operated by Spectra Energy. If built, the pipeline would run 850 kilometers from northeastern BC to Ridley Island.[2]

On March 10, 2017, Shell announced that it had officially shelved its plans to develop the Prince Rupert LNG project.[3]

Watson Island LNG

The Watson Island LNG Corporation formed in 2014 to pursue three natural gasbased projects in northern BC: a polypropylene (plastics) manufacturing facility, an LNG export facility, and a propane export facility. The proposed LNG facility would produce one million metric tons of LNG per year. The City of Prince Rupert entered an exclusivity agreement with the project backer in 2014 to site the facility on Watson Island near Port Edward. But before the city can complete the sale, it must settle a lawsuit over the title to the lands. The City must also remediate industrial chemicals at the site, a $50 million undertaking. There has been no significant news on the project since 2014.[2]

Aurora LNG

Aurora LNG would be sited at Delusion Bay on Digby Island, adjacent to the community of Dodge Cove. The primary project backer is Nexen Energy, a subsidiary of CNOOC, China’s top LNG importer and one of the world’s largest oil and gas companies. Other backers include Japanese companies INPEX, an LNG supplier to Japan, Korea, and Taiwan; and JGC, formerly known as Japanese Gasoline Corporation and now an engineering company that builds LNG facilities. The facility would produce 24 million tons of LNG per year at full build-out. Nexen has not announced a pipeline route to the facility. The backers aim to make a final investment decision in 2017.[2]

Orca LNG

Orca LNG doesn’t yet have an exact location planned, nor has it released a potential pipeline route. Precious little is known about the project backers, who are based in Cypress, Texas, or the proposal itself. Even the project’s website is just a single placeholder page with no information other than a contact email. The NEB granted the project an export license for 24 million metric tons per year. The project proponents plan to operate six floating facilities—converted barges—in the vicinity of Prince Rupert, and each would be able to produce four to five million metric tons of LNG per year. Orca LNG is allegedly in discussion with “several pipeline companies” about using either existing infrastructure or constructing a dedicated pipeline to transport gas from the Western Canadian Sedimentary Basin.[2]

NewTimes Energy LNG

Project backer NewTimes Energy hopes to produce 12 million metric tons of LNG per year at this LNG plant. NewTimes Energy LNG would be located “in the vicinity of Prince Rupert,” though an exact location has not yet been announced. The NewTimes Energy website includes pictures of two proposed pipelines, the Prince Rupert Gas Transmission and Pacific Northern Gas pipelines, though the company does not appear to have reached a supply agreement with either one. NewTimes Energy was a late entrant to the crowded LNG field, and there has been no news on the project since the NEB approved its export license.[2]

WCC LNG Project

WCC LNG is backed by Exxon Mobil and Imperial Oil, an Alberta-based petroleum company partially owned by Exxon. The oil giant plans to site the facility at Tuck Inlet, less than ten kilometers north of Prince Rupert. The proposed site abuts the Woodworth Lake Conservancy, which protects the domestic water supply for the city of Prince Rupert and safeguards important salmon spawning grounds. Exxon hopes the facility will produce up to 30 million metric tons of LNG per year. The project may use one of the pipelines associated with other LNG proposals in the Prince Rupert area.[2]

LNG Proposals on the Northwest Coast

Grassy Point LNG

Project backer Woodside Energy, an Australian oil and gas company, hopes to produce 20 million metric tons of LNG per year at the proposed Grassy Point LNG facility. It would be sited 30 kilometers north of Prince Rupert, across the bay from the Lax Kw’alaams First Nation’s reserve land.102 Woodside is considering either an onshore LNG facility or a floating facility. The pipeline route has not yet been determined, but the feed gas is expected to be transported from the Western Canadian Sedimentary Basin by third-party pipeline. In a June 2016 company report, Woodside said it is continuing to “investigate the potential” of developing the facility.103 The company has likely placed the facility on the back burner while it figures out its recent acquisitions, which include a joint partnership in the proposed Kitimat LNG facility.[2]

Nisga’a LNG

The Nisga’a Nation has offered Nation-owned land as potential LNG project development sites, and it is also considering developing its own LNG project.105 The still-speculative Nisga’a LNG would be located on the Portland Inlet waterway, near the Nass River106 and would receive gas from the proposed Prince Rupert Gas Transmission pipeline. The pipeline would traverse almost 100 kilometers of Nisga’a lands, so it would be the most convenient feeder for the Nation’s own LNG project. The project backers have yet to apply for an NEB export license, and the quantity they hope to export is unknown. Though the Nation began seeking investors in 2014, thus far it has not attracted any.[2]

Kitsault Energy

Kitsault Energy would be located at the ghost town Kitsault, 85 miles north of Prince Rupert. The project backer is self-made millionaire and philanthropist Krishnan Suthanthiran, who purchased the former mining town for about $6 million in 2005. Kitsault is at the head of Alice Arm, the eastern arm of Observatory Inlet. The project’s export license application anticipated requiring an approximately 600-kilometer pipeline—most likely the backer hopes to enter a contract with either the proposed Prince Rupert Gas Transmission Project or the proposed Westcoast Connector Gas Transmission Project. Kitsault Energy’s 20-million-metric-ton-peryear LNG project is still speculative, and there have been no major developments of late, but revitalization efforts at Kitsault will likely remain an interesting affair for tourists eager to visit the abandoned city.[2]

Stewart Energy LNG

Canada Stewart Energy Group, a partnership between a construction executive and an oil entrepreneur, aims to build the Stewart Energy LNG facility near Stewart, British Columbia—a small district of fewer than 500 people near the Alaska border, at the end of the Portland Canal. The project backers hope to export 30 million metric tons of LNG per year. Stewart Energy would start with a floating facility and then build a land-based plant to expand production. The NEB granted the project its export license in early 2016. The export license application indicated that Stewart Energy intends to build a new pipeline to the remote location and operate it as a joint venture with a third-party pipeline company, but no pipeline agreement has been announced. The application also claimed that Stewart Energy had entered into preliminary supply agreements with “five major energy groups” in China, and it named Beijing-based Great United Petroleum Holding Company as one of its strategic partners.[2]

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