BC Business
APPROVEDPacific Trail Pipeline Capacity: 1 billion cubic feet per day Project Cost: $1 billion In early 2013 Chevron Corp. bought out EOG Resources and Calgary-based Encana Corp. to establish itself as managing operator and 50 per cent owner of this 463-kilometre pipeline with Apache Corp. The project has obtained an export licence and has been approved to extend from Summit Lake to the Kitimat LNG export facility to transport natural gas to Asian markets. However, the project has recently had difficulty securing some sales contracts in Asia because buyers are pushing for deals linked to distressed North American gas prices. Apache and Chevron have argued higher prices are needed to justify the large building costs. Construction was intended to start summer 2013 but the B.C. Environmental Assessment Office has given a 2018 extension.
PROPOSED Coastal GasLink Capcity: 1.7 billion cubic feet per day Projected Cost: $4 billion TransCanada was selected by Shell Ltd. to build and operate a proposed pipeline from the Montney gas-producing region, near Dawson Creek, to a liquefied natural gas export facility near Kitimat. Korea Gas Corp., Mitsubishi Corp. and PetroChina Co. Ltd. are partners in the project. Environmental field studies began January 2013, with a plan to submit an environmental assessment application in early 2014.
PROPOSED Prince Rupert Gas Transmission Line Capacity: 2 billion cubic feet per day Projected Cost: $5 billion In January 2013 Progress Energy Canada Ltd., a subsidiary of Malaysian-owned firm Petronas, selected TransCanada Corp. to build a 900-kilometre shale-gas pipeline connecting Hudson’s Hope to a proposed Pacific NorthWest LNG facility on Lelu Island, near Prince Rupert. The LNG facility is expected to include two plants capable of processing six million tons of gas annually. The project is still in early stages as the pipeline route is currently up for discussion in the communities affected, and the first project description was submitted to the B.C. Environmental Assessment Office in May 2013.
PROPOSED Westcoast Connector Capacity: 4.2 billion cubic feet per day Projected Cost: $8 billion A 50-50 partnership between pipeline maker Spectra Energy Corp. and gas producer and marketer BG Group, the proposed pipe will move gas from the Cypress area of northeast B.C. to Prince Rupert at Ridley Island. A feasibility study was completed in May 2013 and the project is currently working through the environmental assessment and permitting process. If approved, the pipeline is projected to be operational by 2019.
PROPOSED Northern Gateway Pipeline Capacity: 525,000 barrels per day Projected Cost: $6 billion Canada’s oil and gas pipeline giant Enbridge Inc. plans to build a twin pipe between Bruderheim, Alberta, and Kitimat, B.C. One pipe would carry diluted bitumen, a heavy oil product, west, while the other smaller pipe would flow east carrying imported condensate, used in oil transport to improve the viscosity of heavy oil. While the pipeline has been met with a lot of public resistance, in November 2013 B.C. and Alberta governments officially agreed to work through the pipeline conditions together after a previously tense relationship.
PROPOSED Trans Mountain Expansion Capacity: 890,000 barrels per day Porjected Cost: $5.4 billion Kinder Morgan wants to expand its existing buried pipeline by 980 kilometres to go from Edmonton to Burnaby and then on to Washington state’s Puget Sound. With 12 new pump stations and 20 new storage tanks, capacity would greatly increase from its current 300,000 barrels per day. The project would cause Burnaby’s Westridge Marine Terminal to expand from one tanker to three, and Metro Vancouver has ordered a report on the environmental impacts of the larger fleet. If the pipeline is approved it’s intended to be operational by 2017.
AltaGas Idemitsu Joint Venture Calgary-based AltaGas Ltd. and Japanese oil refiner Idemitsu Kosan Co. Ltd. have applied to the National Energy Board for a 25-year licence to export liquefied natural gas from northwestern B.C. The two companies signed an agreement in January 2013 to form their joint venture, which now has been named Triton LNG LP. Triton aims to export up to 2.3 million tonnes of LNG annually, or roughly 115 billion cubic feet from either Kitimat or Prince Rupert.
PACIFIC OIL & GAS The Singapore company has proposed an LNG processing and shipping facility in Woodfibre.
B.C. LNG Export Co-Operative B.C. LNG will be operated by Douglas Channel Energy Partners, which is a partnership between LNG Partners and the Haisla Nation in B.C. Currently, there are 16 members of the co-operative. In 2011, the National Energy Board granted B.C. LNG a 20-year licence for the export of 1.8 million tonnes of LNG annually from Kitimat, B.C. In May 2013 an unnamed Asian investor and Golar LNG, a Bermuda-based company that runs a fleet of LNG tankers, announced they have purchased a 25-per-cent stake in the project.
Imperial Oil/Exxon LNG Project Imperial Oil Ltd. and its parent, Exxon Mobil Corp., are in the early stages of planning an LNG export business from B.C. The facility will build on their $3.1- billion acquisition of natural gas producer Celtic Exploration Ltd., as well as gas holdings they already own in western Alberta and in the Horn River shale gas play in B.C. The capacity of the facility has not yet been disclosed. Imperial Oil Ltd./Exxon Mobil have also recently submitted non-binding expressions of interest to acquire Crown land at Grassy Point, B.C., for development of an LNG export facility.
Nexen/Inpex LNG Project Nexen Inc. and Japan’s Inpex Corp. have a joint venture to develop unconventional shale gas assets in the Horn River, Cordova and Liard basins in northeastern B.C. As part of the joint venture, the partners intend to jointly investigate the feasibility of a potential downstream project, including an LNG export facility.
Fortune Creek Gas Plant and Discovery LNG In October, Texas-based oil and gas production company Quicksilver Resources Inc. was issued a conditional Environmental Assessment Certificate for the Fortune Creek Gas Plant, located near the Horn River Basin. The plant will remove hydrogen sulphide and carbon dioxide from raw natural gas to produce treated gas for transport to market. QRI is proposing to develop the facility in stages, with the initial phase having a processing capacity of 4.25 million cubic metres per day and further phases bringing the total processing capacity up to 16.9 million cubic metres per day. This gas would be transported to another potential QRI project: a storage and loading facility titled Discovery LNG on the north side of Campbell River. This proposed facility would be built and operated by a partnership between QRI and a yet-to-be-determined third party in order to convert natural gas into LNG for export to Pacific Rim markets in Asia.
Aurora LNG In 2011 China’s CNOOC Ltd. acquired Calgary-based Nexen Inc. as a subsidiary. Inpex Corp. and JGC Corp., both of Japan, have now partnered with Nexen in a proposed LNG facility and export terminal called Aurora LNG to be located at Grassy Point, near Prince Rupert. As of November 2013 the Nexen-led venture paid $24 million to the Government of B.C. as part of an exclusive agreement for the right to pursue long- term access to the Crown land at Grassy Point to examine the project’s potential. The next steps will involve a site-viability review, an environmental impact assessment and stakeholder consultation. The companies are also looking into developing shale gas assets in the Horn River, Cordova and Liard basins in northeastern B.C.