A FortisBC employee walks past a storage tank and delivery trucks at the existing FortisBC Tilbury LNG facility before the groundbreaking for an expansion project in Delta, B.C., on Tuesday October 21, 2014. THE CANADIAN PRESS/Darryl Dyck

FortisBC inks deal to send LNG by container from Delta facility to China

The FortisBC shipments to China are to be delivered in 60 specialized shipping containers per week

FortisBC is considering further expansions to its liquefaction facility on the Fraser River near Vancouver after landing its first term contract to send Canadian LNG to China.

The utility company, which has operated its Tilbury LNG plant since 1971, said Tuesday it has signed a two-year contract to ship 53,000 tonnes per year of super-cooled gas by the summer of 2021 to Chinese LNG distributor Top Speed Energy Corp.

FortisBC’s recently completed $400-million expansion project took capacity from about 35,000 to 250,000 tonnes per year, allowing a facility that had been used mainly for natural gas storage to become a commercial LNG production plant, said Doug Stout, vice-president of market development and external relations.

“This plant allows us to serve the local marine and transportation markets as well as the smaller-scale export opportunities,” he said.

“We’re looking at further expansions both for this type of market and for the marine and truck transportation markets.”

He says the company is considering an expansion of similar size in the next couple of years, adding there’s room on site to eventually reach capacity of three to four million tonnes per year.

Marine demand for LNG fuel is expected to rise next January when the International Maritime Organization begins to enforce new emissions standards designed to curb pollution produced by ships burning high-sulfur heavy oil.

Small-scale shipments of liquefied natural gas are a growing component in the global LNG sector, especially when the customers are small or unconnected to a pipeline grid, said Alex Munton, Houston-based principal analyst, Americas LNG, for Wood Mackenzie.

“Fortis certainly seems to be developing something of a niche,” he said in an interview.

“There’s a market for this LNG. I mean, we see it in the Caribbean, ISO containers being shipped down to small island markets like Barbados and so forth. It is a means of serving a particular market.”

The FortisBC shipments to China are to be delivered in 60 specialized shipping containers per week.

The volumes, sufficient to heat about 30,000 average British Columbia households per year, will go to smaller commercial and industrial customers in China who don’t have access to natural gas, potentially displacing coal or fuel oil, said Stout.

The contract is modest compared to what’s planned for the Shell Canada-led LNG Canada facility at Kitimat, B.C., a $40-billion project approved last fall that is expected to produce about 14 million tonnes per year after it opens in 2023 or 2024.

“It’s a different ballgame, definitely, from what they’re doing,” said Stout.

His company estimates it would cost $3 billion to $4 billion to build up to three to four million tonnes per year, he said, adding that doesn’t include providing for the required increase in electricity to operate the plant, nor the additional natural gas supply and delivery.

FortisBC says it has been selling small shipments of LNG in China on a spot basis since 2017.

It is owned by St. John’s, N.L.-based Fortis Inc.

ALSO READ: Environmental assessment underway for proposed Delta LNG jetty

ALSO READ: B.C. man’s challenge of controversial LNG pipeline in hands of NEB

Dan Healing, The Canadian Press


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