The Port of Prince Rupert in northern British Columbia.Brent Jang/The Globe and Mail
A new entrant in the race to export liquefied natural gas believes that rail would be the best option for transporting the fuel from the B.C. Interior to the West Coast, before shipping it in tankers to Asia.
Instead of requiring a lengthy new B.C. pipeline to the West Coast, Summit Lake PG LNG envisages supercooling natural gas into liquid form near Prince George and then transporting the LNG in specialized shipping containers by rail to the Port of Prince Rupert.
Last week, the B.C. Environmental Assessment Office and the Impact Assessment Agency of Canada opened a comment period that runs until May 2 for public feedback on Summit Lake.
The company’s strategy contrasts sharply with other northern B.C. LNG proposals, which hinge on building pipelines stretching hundreds of kilometres to the West Coast, where the fuel is then supercooled into liquid form.
JX LNG Canada Ltd., the Calgary-based subsidiary of Changchun Jixing New Energy Ltd. of China, is the proponent of Summit Lake.
The proposed location of the new facility is on the Hart North industrial site, about 30 kilometres north of Prince George. Canadian National Railway Co.’s CNR-T network includes tracks that run from the B.C. Interior to the Fairview container terminal in Prince Rupert.
After the natural gas is supercooled, the resulting liquid would go into storage tanks before being loaded into International Organization for Standardization (ISO) shipping containers to be transported on railcars.
“The CN Rail line passes along the west portion of the site at a grade which will make railway extension into the site relatively easy,” JX said in its initial project description.
JX said it has held talks with Enbridge Inc. ENB-T to obtain natural gas from northeast B.C. using the pipeline company’s provincial system. A new two-kilometre pipeline would be required to connect the Summit Lake project with Enbridge’s system.
The Hart North industrial property is located on the traditional territory of the Lheidli T’enneh First Nation.
JX said it has conducted early engagement with Indigenous groups such as the Lheidli T’enneh, McLeod Lake Indian Band, Nazko First Nation, West Moberly First Nations and Nak’azdli Whut’en. It said the Nazko have expressed concern about the impact on the Fraser River watershed, while the Nak’azdli Whut’en have sought details on the potential ripple effects on the salmon population. The company has retained engineering consulting firm Keywest Projects Ltd. for the environmental assessment process.
Shell PLC-led LNG Canada, which is nearing completion of construction in Kitimat, B.C., plans to start exporting the fuel to Asia by mid-2025. It will become the first terminal in Canada for exporting the fuel in tankers, with a full-swing capacity of 14 million tonnes a year. Summit Lake’s capacity would be 2.7 million tonnes annually.
Summit Lake is playing catch-up with Cedar LNG, which has been in the works for the past decade. Pembina Pipeline Corp. became co-owner in the Cedar project in Kitimat by acquiring a 49.9-per-cent stake in June, 2021. The Haisla Nation continues to own a 50.1-per-cent interest as majority owner.
Cedar envisages beginning exports to Asia in 2028 – the same year that Summit Lake plans to open the first of its two phases.
Ten years ago, there were more than 20 proposals in B.C. to export LNG to markets in Asia. Since then, dreams for Canada to become a major LNG player globally have faded. Despite much hype, Cedar and Summit Lake are among only a handful of remaining export prospects in B.C.
Cedar, which expects to make a final investment decision by mid-2024, would have an annual export capacity of 3.3 million tonnes of LNG. The Haisla-led venture would rely on supplies of natural gas delivered through the contentious Coastal GasLink pipeline project, which completed construction in October, with LNG Canada as the primary destination.
Cedar’s floating liquefaction vessel would be built in South Korea.
Both Cedar and Summit Lake have plans that hinge on securing electricity from BC Hydro for powering electric motors that drive compressors for liquefaction.
Other export possibilities include FortisBC’s expansion plans at its domestic Tilbury LNG site in the Vancouver suburb of Delta; Ksi Lisims LNG on Pearse Island; and Woodfibre LNG near Squamish.
The Tilbury plant is a small-scale operation that briefly exported a small amount of LNG in containers. The facility wants to be a key supplier of marine fuel for ships powered by LNG in the Port of Vancouver and then eventually export LNG in tankers.
Last month, FortisBC and Seaspan obtained an environmental assessment certificate from the B.C. government to build a new jetty, or dock, at the Tilbury site. The project is now awaiting federal approval from the Impact Assessment Agency of Canada.
FortisBC is going through a separate regulatory process in hopes of gaining approval to expand its Tilbury plant.
Ksi Lisims is undergoing a regulatory review to obtain environmental approval. Woodfibre is seeking a permit from the District of Squamish for a floating hotel to house about 600 construction workers.
Industry analysts have longed warned that B.C. proponents must accelerate their plans or risk being left out of the global race to export LNG.
But a report last month by Clean Energy Canada said the focus on fossil fuels such as LNG ends up delaying the transition to renewable energy. The think tank at Simon Fraser University rejected industry arguments that B.C. LNG would play a key role in displacing thermal coal used in Asia for generating electricity. It also warned that the fledgling sector in B.C. will worsen climate change by locking out cleaner energy sources while also placing a strain on scarce electricity supplies within the province.
Brent Jang