7 things you need to know about proposed micro-LNG development in northwest B.C.

A pipeline expansion and a pair of liquefaction facilities fall below the provincial thresholds for environmental assessment and are quietly making their way through the regulatory process

Liquefied natural gas is a hot topic in B.C. But while all eyes are on megaprojects like the Coastal GasLink pipeline and the LNG Canada liquefaction and export terminal, micro-projects are flying under the radar. 

Pacific Northern Gas is proposing to upgrade its existing natural gas pipeline, the Western Transmission Gas Line, including restoring parts of the system that haven’t been used for over a decade. This upgraded pipeline would feed two proposed micro-LNG facilities, Skeena LNG and Port Edward LNG. All three proposed projects are making their way through the regulatory process.

Here’s what you need to know.

What is Pacific Northern Gas?

Pacific Northern Gas is a natural gas company that operates one pipeline in northwest B.C., serving over 40,000 residential, commercial and industrial customers along the Highway 16 corridor. The Western Transmission Gas Line connects to an Enbridge pipeline at Summit Lake, near Prince George, which gets its gas from sources in the northeast, and terminates in Prince Rupert and Kitimat.

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It has been operating at reduced capacity since losing a few of its major industrial customers over the past 20 years — Prince Rupert’s pulp mill shut down in 2001, Kitimat’s methanol and ammonia facility followed in 2005 and the Kitimat pulp and paper mill closed its doors in 2010.

The company is owned by TriSummit Utilities, formerly AltaGas, which is co-owned by the Public Sector Pension Investment Board, a federal Crown corporation, and the Alberta Teachers’ Retirement Fund Board.

What are the proposed expansions to the pipeline?

Pacific Northern Gas wants to build two new compressor stations and reactivate four that are not in use. About the size of a small single-family home, a compressor station diverts the gas from the pipeline and runs it through a compressor, which increases the pressure in the pipeline to keep the gas moving. 

One station would be located between Terrace and Kitimat and the other between Terrace and Prince Rupert. The company also wants to upgrade sections of the existing pipeline and install four extensions of under five kilometres each to connect to the new facilities. One of those extensions would divert the route away from a populated area that was vacant when the pipeline was first built in the late 1960s, rather than digging up the existing pipe. 

The proposed expansion to the Western Transmission Gas Line includes building two new compressor stations and reactivating four. Illustration: Pacific Northern Gas

The Western Transmission Gas Line would transport an additional 400,000 cubic metres of natural gas per year, less than one per cent of the volume Coastal GasLink will move through its pipeline.

Pacific Northern Gas expects the expansion will cost $60 million. The company told The Narwhal if it is approved, it plans to start construction in the fall. 

What is Skeena LNG?

Skeena LNG would be a micro-LNG facility where natural gas is liquefied. Top Speed Energy, a Chinese company, is behind the project, which would be located on an industrial site near Terrace.

Before natural gas can be transported by ship, truck or rail, it needs to be condensed into liquid form. Liquefaction facilities cool the gas to -162 C, reducing its size to 1/600 of its previous volume. The gas is then transferred into pressurized containers that allow it to be transported without refrigeration for several weeks. 

Top Speed Energy LNG truck

Top Speed Energy plans to truck LNG from Skeena LNG to remote mines and communities in northern B.C. and to the Prince Rupert port for shipment overseas. Photo: Top Speed Energy

Micro-LNG facilities do the same thing as larger facilities, but on a much smaller scale. Skeena LNG would produce 150,000 tonnes of LNG every year — less than five per cent of LNG Canada’s volume. 

As The Narwhal previously reported, the company plans to sell this LNG to remote communities and mining operations in northern B.C., replacing other energy sources like diesel. It also plans to export to overseas markets such as Thailand, Vietnam and Malaysia.

To get its product to overseas buyers, Top Speed Energy would first have to get it to Prince Rupert where it would be loaded onto container ships. That means it would fill up to 24 trucks every day, 365 days a year, and send them along Highway 16, a scenic stretch of road that follows the path of the Skeena River. 

Top Speed Energy previously told The Narwhal it hoped to start construction this spring, but did not reply to an interview request for this story.

What is Port Edward LNG?

Port Edward LNG is a B.C.-based company solely focused on building its namesake micro-LNG facility. The company is proposing to build its facility on a site it purchased last year overlooking a coastal inlet about 20 kilometres from Prince Rupert. It would also produce 150,000 tonnes of LNG per year.

Chris Hilliard, president of the company, told The Narwhal the company is focused on selling LNG to customers in China, particularly companies looking to replace low-grade diesel for barging operations and small cities looking to replace coal-burning facilities.

“The growth of consumption of natural gas, as it replaces coal and diesel, is immense,” he said in an interview. “[China is] also the fastest growing in terms of the implementation of renewables, but even they can’t do it fast enough. So we are part of that transition answer.”

If approved, the company plans to start construction this year and begin operations in 2023. 

What are the concerns with these projects?

NDP Skeena-Bulkley MP Taylor Bachrach said he has heard from residents concerned about the increased transportation of hazardous materials throughout the region. 

“Local governments and community members really want to have a sense that our regulatory system and our emergency response systems are up to the task of protecting communities as we see a larger volume of dangerous goods moving through our region,” he said in an interview.

taylor bachrach seen through glass, sitting at a desk looking at a laptop

NDP Skeena-Bulkley MP Taylor Bachrach would like to see more transparency from project proponents. Photo: Marty Clemens / The Narwhal

The Narwhal reached out to the province’s ministry of transportation but did not receive a response prior to publication. 

Transport Canada told The Narwhal in an emailed statement it provides regulatory oversight on the transport of dangerous goods and said it conducts over 5,000 risk-based inspections annually.

Also, while the proposed projects are small, any new LNG projects contribute to the cumulative impacts of increased fracking activity and associated methane emissions.

“We’re concerned about anytime we’re expanding fracking to power these things [and the] upstream impacts they have, especially on the land and water in the Peace Valley and the Horn Basin,” said Sven Biggs, oil and gas program director with Stand.Earth. “And the methane emissions that come with fracking are one of the key drivers of climate change.”

Natural gas is composed primarily of methane. Methane emissions, in the short term, warm the climate much more quickly than equivalent carbon emissions. And as more projects come online, the subsequent increases in fracking activity puts further pressure on B.C.’s ability to meet its emissions reduction targets.

Emissions aren’t the only concern with increased fracking activity. 

“The thing about fracking is that it has a much bigger footprint than I think people realize,” Biggs said. “Infrastructure in that area fragments the wilderness, destroys traditional hunting grounds and contaminates local water. It’s hard to measure the impact because it’s so spread out.”

Who decides if these projects go ahead?

The proposed work on the pipeline is subject to approval by the B.C. Utilities Commission — an independent agency of the B.C. government that oversees provincial energy utilities such as hydro and gas. 

In early 2020, the B.C. Utilities Commission approved the pipeline company’s initial plans, after  Pacific Northern Gas consulted with the public. The commission told The Narwhal in an emailed statement it conducted an “open and transparent public review process” before making its decision. The company plans to submit its application to the utilities commission this month. 

The LNG facilities recently submitted permit applications to the B.C. Oil and Gas Commission — a provincial Crown corporation — both of which are currently under review. 

Biggs described the commission as a “one-stop shop for industry.”

“[The province has] put a lot of power in the hands of one regulator,” he said. “Through a combination of turning a blind eye to problems in the industry and underfunding that office, almost no regulation is happening on the ground.”

Neither the proposed pipeline expansion nor the micro-LNG projects have to go through the environmental assessment process. 

Why don’t the projects have to go through the environmental assessment process?

The pipeline expansion project is not subject to environmental assessment because the majority of the work is reactivating existing components. The proposed LNG facilities are not required to undergo environmental assessment because they won’t exceed production and storage thresholds set by the province. 

To be subject to environmental assessment, an LNG facility has to have the capacity to store more than 136,000 cubic metres of liquefied natural gas, according to the B.C. Ministry of Environment and Climate Change Strategy.

A provincial environmental assessment would mandate meaningful consultation with stakeholders, including First Nations, and ensure public transparency. It would require the companies to make public their design plans, mitigation strategies for environmental impacts and consultation documents.

Neither Skeena LNG nor Port Edward LNG have their project plans available to the public, apart from a general overview. 

Highway 16, Skeena River

Top Speed Energy wants to truck LNG along B.C.’s scenic yet dangerous Highway 16, which follows the Skeena River. Photo: B.C. Ministry of Transportation and Infrastructure / Flickr

Hilliard said there proprietary reasons a company might not want to disclose its technical plans or regulatory applications, but added that he is committed to working with both Indigenous and non-Indigenous communities that might be impacted by the project.

“Our goal is to be as transparent as we can be,” he said. “We are committed, when conditions allow, to having open houses and ongoing public forums.”

Biggs said he would like to see the province reconsider its position on environmental assessment.

“I think the Ministry of Environment and the B.C. Environmental Assessment Office should take a second look at these projects and consider adjusting the threshold so they’re getting at least a basic B.C. environmental assessment, which is not a terribly strenuous bar to climb over —  especially for a fossil fuel project,” he said in an interview.

Bachrach told The Narwhal he would like to see more transparency from the proponents.

“It’s never going to be a perfect process but the more transparency we have, and the more opportunities for engagement we have, I think the stronger the process will be,” he said in an interview. “Being transparent with communities and with residents is really the best way to build support and social licence for any project.”

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