Skeena LNG: five things you need to know about the proposed project in Terrace, B.C.

The stretch of highway between Terrace and Prince Rupert, B.C., is among the province’s most scenic. Following the meandering path of the Skeena River, the road is hemmed in by steep mountains.

In the spring, eulachon run up the river, bringing with them innumerable birds and seals and sea lions, the latter often catching rides on floating chunks of ice. In winter, the road is subject to snow and freezing rain, making driving conditions treacherous. It’s common to see the ditches littered with overturned cars and trucks — including commercial and industrial vehicles.

If Top Speed Energy, a Chinese company based in Vancouver, gets the go-ahead to build a natural gas liquefaction facility in Terrace, 24 trucks loaded with LNG will navigate this stretch of Highway 16 each day. 

The company plans to operate 24-7 and will transport the cooled gas on trucks to remote communities in northwest B.C. and to the Prince Rupert port for shipment overseas. 

Top Speed Energy is currently seeking permits for the project, known as Skeena LNG, from the BC Oil and Gas Commission and hopes to start construction next spring. Here are five things you need to know about the proposal.

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

What is the Skeena LNG project?

To turn natural gas into a liquid, it has to be cooled to -162 C, at which point it condenses into liquid form at 1/600 of its previous volume, making it much more efficient for transport.

Top Speed Energy is proposing to build its natural gas liquefaction facility on an industrial site near the Terrace airport. A small feeder pipeline would connect the plant to an existing pipeline owned by Pacific Northern Gas, a company that primarily supplies natural gas to residential customers across northwest B.C. Skeena LNG would use electricity supplied by BC Hydro to power its operations.   

The proposed facility is relatively small. Skeena LNG would liquefy less than five per cent of the volume of its Kitimat neighbour LNG Canada. By tapping into the existing pipeline, Skeena LNG’s environmental impact would be considerably less than most of B.C.’s proposed LNG projects. 

Why isn’t Skeena LNG undergoing an environmental assessment?

Because Skeena Energy’s capacity would be so low, the project doesn’t require an environmental assessment. According to a statement from the B.C. Ministry of Environment and Climate Change Strategy provided to The Narwhal, an environmental assessment is only required if a proposed LNG facility has a storage capacity of more than 136,000 cubic metres of liquefied natural gas. Skeena LNG would fall far below that. While the company would not say what the facility’s storage capacity would be, its estimated total annual production would be 150,000 cubic metres and it would only store small amounts for short periods of time.  

If the project were subject to an environmental assessment, all documentation, including design plans, environmental impact mitigation strategies and First Nations consultation documents would be publicly available. 

The Narwhal repeatedly requested a copy of the detailed project description from Top Speed Energy and the BC Oil and Gas Commission but wasn’t provided with one.

Carol Brown, a director with the Prince Rupert Environmental Society who lives in Dodge Cove, a small community directly opposite the port, said she sent letters to the government requesting the project undergo an environmental assessment. She expressed frustration that the project appears to be “flying under the radar” because of its size. 

“Lack of regulations and oversight are a big concern with so many corporations wanting to ship petroleum products through Prince Rupert Port Authority,” she wrote in an email.

LNG from the proposed Skeena LNG terminal would be shipped in containers to overseas markets from the Fairview Container Terminal at the Prince Rupert port. Photo: Prince Rupert Port Authority

Eoin Finn, a retired KPMG partner who has spent several years studying the benefits and risks of B.C.’s LNG industry, warned that while the project may be small initially, many LNG projects apply for permits to expand after a few years of operations. 

“I have never seen a proposal to downsize an LNG facility,” he wrote in an email. “So you should think of this as a Trojan horse for a much bigger facility.”

The project has the support of the City of Terrace and Liberal Skeena MLA Ellis Ross, who presented to city council earlier this year, advocating for the project as a means to boost economic recovery from the COVID-19 pandemic in the region. 

The Narwhal reached out to Ross for comment but did not receive a reply by publication time.

Why is Top Speed Energy proposing to transport LNG via truck?

While most of the proposed LNG terminals in B.C. are on the coast, allowing the gas to be loaded directly onto LNG tankers, the Skeena LNG facility would be located inland, hence the need for trucking.  

Top Speed Energy plans to put the gas in special double-walled containers called ISO containers. These pressurized containers allow the LNG to be transported for up to several weeks without the need for refrigeration, which means they can be placed on regular container ships rather than LNG tankers. 

ISO containers allow LNG to be transported for up to several weeks without refrigeration. Photo: Top Speed Energy

“With these ISO containers, it gives us the flexibility to move the LNG to wherever we like,” Adam Tang, Top Speed Energy business development manager, said in an interview. 

Tang said ISO containers allow them to deliver LNG to consumers without building more pipelines. “We have some buyers talking with us from Thailand, from Vietnam, from Singapore and Malaysia,” he said.

Closer to home, Tang said the company hopes to provide LNG to remote communities and mines in northwest B.C. Many of the region’s small communities and mines produce electricity with diesel generators. “We want to focus on remote and First Nations communities,” he said. 

Tang told The Narwhal the company is in talks with communities across the region and a mining company based in Stewart and hopes to engage other mining companies as it moves forward with the project.

As an example, he pointed to Silvertip, a silver, zinc and lead mine near the Yukon border that is already fueling its operations with natural gas. “They use trucks to carry the LNG for around 3,000 kilometres from the Lower Mainland to the boundary between Yukon and B.C.”

However, early this year, Silvertip temporarily halted operations, citing declining prices in zinc and lead markets. The LNG market is similarly experiencing a slump, a downturn only made worse by the COVID-19 pandemic.

If Top Speed Energy built its plant in Terrace, it would be in a better position than other companies to supply Silvertip and other mines in the region currently operating on diesel, Tang said.

What are the safety risks of transporting LNG via truck?

While accidents are rare, transporting LNG by truck raises safety concerns. In the unlikely event of a spill, LNG vapour could cause a fire or explosion if ignited. 

Trucking LNG would be new in northwest B.C., but it’s been happening elsewhere in the province and around the world for several years. 

FortisBC regularly trucks LNG from its Tilbury Island facility in Delta, B.C., to the BC Ferries terminal in Tsawwassen to fuel small ferries that run on natural gas. Last year, FortisBC signed an agreement with Top Speed Energy to have the company transport 53,000 tonnes of LNG from the Tilbury facility to China by summer 2021.

In northernwest B.C., where winter weather conditions can change rapidly, the risks are higher. 

“Seems to me the biggest risk is the trucking of 20-tonne tanks of LNG on public roads in Terrace, Rupert, Kitimat — many times more risky than LNG tankers, or the plant itself,” Finn said, adding that he has tried unsuccessfully to get Marc Garneau, federal minister of transport, to address the issue of the increased danger on public roads.

On the coast, some residents are concerned about the safety of shipping LNG in containers, given the proximity of the container terminal to their communities. Brown said transporting LNG on ships through the narrow entrance to the Prince Rupert harbour would mean the gas would be within two kilometres of the residents’ homes. 

What do new LNG projects mean for B.C.’s climate targets?

For Dave Shannon, energy and climate change chair of the Terrace chapter of the Council of Canadians, safety concerns are secondary to the question of whether B.C. should continue extracting natural gas at all. 

“Even though it’s attached to the Pacific Northern Gas pipeline, it still means more fracked gas would be required,” he said in an interview. “I’m strongly opposed, mostly on the basis of fracking and the fracking effects on methane releases.” 

Hydraulic fracturing produces methane emissions, which, in the short term, have a significantly higher impact on global warming than equivalent carbon dioxide emissions.

As The Narwhal reported last month, the push to increase B.C.’s LNG production is at odds with its climate targets. The Canadian Centre for Policy Alternatives and the Corporate Mapping Project released a report that found if all proposed LNG projects go ahead, the province will exceed its 2050 climate target by 227 per cent.

LNG extraction in B.C. is often touted as a means to help countries transition off other fossil fuels like coal. But Canada’s commitment to reducing greenhouse gas emissions and achieving net zero by 2050 is at odds with expanding the country’s LNG industry.    

“Natural gas has been talked about as a bridge fuel, but the challenge we’re now facing is a really compressed timeline,” NDP Skeena-Bulkley MP Taylor Bachrach said in an interview. “And we have fewer and fewer opportunities for slow incremental change over time, so we need to be employing more aggressive strategies for decarbonisation.”

Bachrach said he met briefly with Top Speed Energy to learn about the project and plans to connect with residents to listen to their concerns. “I am hoping to have a chance to hear more perspectives and gain a deeper understanding of what it is that’s being proposed.”

Both Bachrach and Shannon agreed that helping remote communities transition off diesel could be beneficial for the region, particularly coastal communities. Diesel is extremely toxic to fish and persists in the marine environment for years because it’s water soluble. 

Tang said one of the communities they would like to provide service to is Hartley Bay, a small Tsimshian community about 150 kilometres south of Prince Rupert. 

Top Speed Energy plans to ship LNG to remote northwest B.C. communities and mines. Photo: Top Speed Energy

Bachrach called the idea “intriguing” and said as an MP serving the region, he tries to keep an open mind when considering proposed projects. “My philosophy and my approach is to be as accessible as possible and to try to maintain dialogue with as many perspectives as possible.”

But Bachrach said the greater issue of global climate change and Canada’s commitment to reducing its greenhouse gas emissions must be considered when weighing the benefits of any fossil fuel project, even a small one. 

“It’s becoming more and more evident that for things to move forward, they need to be consistent with these higher-level objectives, which the government — both provincially and federally — has committed to,” he said. “A decade ago, the emphasis was really on immediate local impacts, but you now have this higher-level cumulative impact that needs to be managed, particularly when it comes to climate.”

Updated on Sept. 11, 2020, at 10:40 a.m. PST: This article was updated to remove references to tanker explosions in China because The Narwhal couldn’t independently verify if the gas being transported was LNG or liquefied petroleum gas.