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Tilbury liquefied natural gas (LNG) facility expansion update: Strong market demand for BC LNG supply

August 19, 2014
In November 2013, FortisBC announced plans for a $400-million expansion of its Tilbury LNG facility including one additional storage tank and associated liquefaction equipment. The expansion will provide LNG to the transportation market, remote communities and the marketplace. The facility has been operating safely since 1971, providing gas supply to utility customers during periods of high demand such as cold winter days.
 
Currently, LNG produced at the Tilbury LNG facility is for sale in both local BC markets and regional markets including truck-based exports to the US by other parties. Under its open tariff rate schedule 46, FortisBC has been providing LNG to serve local fleets and more recently to remote communities such as Inuvik and Whitehorse. LNG from the facility is currently being shipped in ISO-containers to Vancouver Island by a third-party ferry service for use in the transportation industry on the Island.
 

Expansion project contractor selected

On July 28, 2014 FortisBC announced the selection of Bechtel Canada Co. as the Engineering, Procurement and Construction contractor for this expansion after a competitive procurement process. Bechtel brings global experience in the development of LNG facilities to the project. Project construction is expected to employ 150 skilled workers over two years and provide an estimated $4 million per year in taxes to various levels of government over time. Project construction is scheduled to begin in October 2014 and is estimated to be completed in late 2016.
 

Widespread LNG interest from outside the province

Since the November 2013 expansion announcement, there has been considerable interest for LNG supply from the Pacific Northwest, Hawaii, Alaska, and international markets. On Friday August 8, 2014 Hawaiian Electric’s board approved an LNG supply agreement with FortisBC, which still needs to be finalized pending approvals from regulators in BC and Hawaii. Hawaiian Electric has stated that they have yet to determine the transportation arrangements for LNG supplied from Tilbury.
 

Prepared to meet the needs of the marketplace to benefit our customers

LNG market demand is evolving rapidly and FortisBC will need to augment the current Tilbury expansion plans to meet the demand. Specifically, additional liquefaction equipment would be required in order to meet Hawaiian Electric’s LNG supply agreement.
 
The additional volumes of natural gas moving through FortisBC’s pipeline system as a result of this increased demand benefit all natural gas customers. Better year-round utilization of FortisBC’s infrastructure, especially during the summer months when heating requirements are reduced, helps to keep natural gas delivery rates stable for all customers.
 
As the market continues to evolve, we expect modes of transport for LNG produced at our facility to include trucking, ISO-container and, potentially, ships consistent in size with other marine vessels on the Fraser River. Although the existing site of the Tilbury facility has the potential for future storage expansions, FortisBC’s focus remains on the addition of one storage tank and associated liquefaction equipment.
 

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