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Tilbury LNG plant gets $400M upgrade
Natural gas giant FortisBC will build a $400 million expansion to its liquefied natural gas plant on Tilbury Island in Delta that will target growing demand for cheaper fuel in the transportation industry.
The move is intended to better support the provincial government in the development of natural gas for the transportation sector, creating opportunities for industry and remote B.C. communities, said FortisBC president and CEO John Walker.
The current liquefied natural gas (LNG) plant can generate 130,000 cubic metres of natural gas per day, and would increase capacity to 1.69 million cubic metres per day in the new plant. The expansion is expected to include a second tank and a new liquefier, both to be in service by mid-2016.
FortisBC has been freezing natural gas on Tilbury Island since 1971 in order to provide a stash of energy for peak winter demand. Using a 4,000-horsepower electric motor, the gas is chilled to minus-160 degrees Celsius to create liquefaction and then pumped into a storage tank that can hold 42 million cubic metres at a time.
In 2011 FortisBC announced a deal with Vedder Transport Ltd. to provide an LNG fuelling station to their tractor trailer fleet, reducing an estimated 3,500 tonnes of greenhouse gas emissions (GHG) and saving the company 30 per cent in diesel costs.
A new potential client is BC Ferries, which is currently exploring all options to reducing operating costs in the face of rising fares and cut sailings.
Deborah Marshall, a spokeswoman with the Crown Corporation, said LNG as a fuel source is definitely cheaper than conventional diesel but a final decision has not yet been made.
“We are out for tender right now,” she said. “We’ve got a request for expressions of interest right now to replace two vessels with three new ships but the responses from the shipyards will determine whether we go with LNG or not.”
BC Ferries is looking to make an announcement in early 2014. Although the capital cost of LNG-equipped ferries would be more than diesel, Marshall said the operator could save as much as 40 per cent in fuel costs.
Helping expedite the process is the provincial government, which waived a review of the Tilbury plant expansion by the B.C. Utilities Commission, lowered the LNG dispensing fee recommended by the commission, and provided increased incentives to FortisBC.
The per gigajoule LNG dispensing fee will be $4.35, instead of the $6.40 recommended by the BCUC, while the price of the natural gas itself will be $3.80/GJ. Natural gas consumption is subject to provincial carbon tax of $30/tonne of CO2 equivalent, adding about $1.49/GJ. One gigajoule is roughly equivalent to 26 litres of gasoline.
The province is also offering up to $2,500 off the sticker price for qualifying compressed natural gas vehicles–highly pressurized methane–under the Clean Energy Vehicle program as part of a planned five-year, $62 million program to reduce transportation emissions for heavy duty natural gas vehicles. In March, FortisBC announced $6 million in incentives to CNG vehicle fleets operators like the City of Vancouver, BC Transit and five others.
A spokesperson with the Ministry of Energy and Mines said the exemption of FortisBC’s expansion of its Tilbury LNG facility from a certificate of public convenience ensures that FortisBC can begin construction in a “timely manner.”
“British Columbia is a climate action and clean energy leader,” said Matt Gordon. “We are the first jurisdiction in North America to have a carbon-neutral public sector and our revenue-neutral carbon tax has created positive change. This leadership guides the development of our liquefied natural gas industry.”
Gordon said natural gas vehicles produce 20 to 30 per cent fewer GHG emissions compared to a gasoline or diesel vehicles.
Mayor Lois Jackson said FortisBC went before Delta Council for a public hearing on the expansion in the spring and there was no opposition from residents.
“There seems to be no doubt that it is one of the cleanest fuels that can be used,” said Jackson, adding that it’s good to target trucking fleets to reduce GHG emissions.
Jackson also praised the “well-paying jobs” the plant will bring to the local economy. FortisBC estimates 300 person-years of employment will be generated during construction, with a further five or six permanent jobs at the plant once completed.