Low natural gas prices closer

New pipelines will mean more supply for Terrace and rest of Northwest

THE PROSPECT of cheaper natural gas bills for northwestern residents brightened last week with more companies signing onto a planned liquefied natural gas (LNG) project in Kitimat.

Commonly called BCLNG, the project, which would take the form of a LNG plant on a barge, would use gas shipped through the Pacific Northern Gas line which serves the northwest.

Although the cost of gas itself has dropped substantially in recent years, northwestern residents and small businesses have had to shoulder more of the costs of delivering the gas through the pipeline because large industrial who once used the line have gone out of business.

BCLNG’s gas requirements would take up the excess capacity of the line, providing Pacific Northern Gas with more revenue.

The expectation is that the new revenue would in turn cut delivery costs for current northwestern residents and businesses.

BCLNG had been a project of the Haisla and of a Texas enterprise LNG Partners but that ownership structure expanded last week to include an unnamed Asian company and Golar, a company which owns the specialized kind of vessel needed to ship LNG overseas.

“They will work with us and LNG Partners of Houston to carry the project through permitting and a final investment decision later this year,” Haisla chief councillor Ellis Ross said.

Golar is also expected to provide the expertise needed to put the floating LNG barge into place.

The Haisla have already secured land on Douglas Channel tidewater on which facilities will be built to pump gas from the PNG pipeline to the barge.

Golar will have a 25 per cent stake in the project and the Haisla’s stake will now be 27.5 per cent.

A successful investment decision this year would pave the way for the first gas to be exported starting in 2016.

BCLNG is just one of two LNG projects to receive environmental approval and an export licence; the other is the Chevron/Apache Kitimat LNG plant.

But at an initial production level of 600,000 to 700,000 metric tonnes a year, it is much smaller than the 12 million tonnes a year forecast by Kitimat LNG.

BCLNG also has a key advantage over any other LNG project along the north coast – it will use an existing pipeline. The other projects require pipelines of their own.

A successful investment decision this year would also go a long way to fulfil Premier Christy Clark’s BC Jobs Plan promise of having at least one LNG project up and running by 2015.

The jobs plan was also an important part of the BC Liberal election platform and it tied in with another BC Liberal promise, to create a $100 billion Prosperity Fund using LNG revenues.

Ross said the new partnership structure will also consider doubling the amount of LNG to be produced.

That, in turn, will require some sort of expansion of the current Pacific Northern Gas pipeline.