Final LNG route cost not known

After lengthening the route, the company that would build the pipeline to a planned Prince Rupert LNG plant is working on a final cost

The company that would build the natural gas pipeline to a planned liquefied natural gas (LNG) plant at Prince Rupert is still working on a final cost after lengthening the route.

First estimated at approximately 730 kilometres, the Prince Rupert Gas Transmission project is now to be 900 kilometres long, connecting gas fields in northeastern B.C. via a single 48-inch diameter pipe to the Pacific NorthWest LNG project on Lelu Island near Prince Rupert.

For now builder TransCanada is sticking to the $5 billion target figure set out in 2013 when the route was to be 730 kilometres.

“We have not arrived at a final cost for the project – beyond the original $5 billion estimate – as we continue to make small adjustments based on ongoing discussions with stakeholders,” said TransCanada official Garry Bridgewater.

Some of the route changes, making the pipeline longer, came fairly early on the in the planning when the company opted to avoid nature conservancies east and north of Prince Rupert.

One of those areas, the Khutzeymateen, contains a grizzly bear sanctuary.

As a result, the pipeline will now be laid underwater beginning at Nass Bay on the north coast before turning south to surface on Lelu Island.

Malaysian company Petronas, the majority owner of the Pacific NorthWest LNG project, said pipeline construction costs were a factor when it decided late last year to delay a decision on proceeding or not proceeding.

Bridgewater said it would be incorrect to assume that underwater construction would necessarily add to construction costs.

“There are many factors to consider when laying pipe – terrain, access, etc. We are continuing to refine our estimate of costs prior to the final investment decision by our customer.  We won’t know how final costs will play out until we conclude discussions with aboriginal groups and the various stakeholders along the route,” he said.

The company also chose a route on the north side of the Kispiox Valley in the Hazeltons after its first choice, a route on the southside of the valley, was opposed by residents.

Both TransCanada and the provincial government have signed agreements with the Nisga’a Lisims Government providing cash and other benefits to allow the pipeline to cross through Nisga’a Lands.

One of the provisions of the agreement between TransCanada and the Nisga’a is an option for the Nisga’a to take gas from the pipeline should their plans for a LNG plant solidify.

That supply option has not affected the project’s costs, said Bridgewater.