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A liquefied gas boom gives Kitsault new life as an export centre.
A liquefied gas boom gives Kitsault new life as an export centre.

ENERGY

Buyer pictures B.C. ghost town Kitsault as gas hub Add to ...

Since he slapped down a reported $7-million to buy the B.C. town of Kitsault in 2005, Krishnan Suthanthiran has floated several notions of what the remote community could become.

In interviews, he has talked of making the town – built to house workers for a mine that closed in 1982 – a gathering place for scientists and artists or a centre for ecological retreats.

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Now, however, inspired by a regional resource boom and perhaps the impact that a pretty, but mostly vacant, town is having on his finances, he’s come up with another concept: making Kitsault an export hub for liquefied natural gas, or LNG.

“The goal at Kitsault has always been creating an economic activity to make it a self-sustaining community,” Mr. Suthanthiran said Tuesday in a telephone interview from Ottawa, where he had held a press conference to outline his plan. “This one will probably create more jobs than any other thing I have thought about.

“And more importantly, jobs for the locals – which is the first nations youth … the goal is to create viable, long-standing jobs for aboriginal youth.”

A website describes a $20-billion-to-$30-billion project that would include a plant, refinery and export terminal.

Major companies including Shell, Chevron and BG Group are looking at LNG projects in B.C., hoping to connect B.C. natural gas to Asian markets.

The potential success of Mr. Suthanthiran’s proposal, like others, would depend on factors that include financing, regulatory approvals, long-term deals with customers and negotiations with aboriginal groups in B.C., said Jihad Traya, associate director of North American natural gas with energy consultancy IHS Cera in Calgary.

“The question is not where the LNG terminal is – nor is the question do we need the LNG terminal. The question is: Can you get the upstream and the downstream connected?” Mr. Traya said. “Propose it, yes – but can you deliver the goods.”

B.C. Premier Christy Clark has said she wants three LNG plants to be up and running by 2020.

Mr. Suthanthiran, who is president and founder of the Best Medical group of companies, is not the only outsider in the LNG race. In October, the National Energy Board awarded a two-year natural-gas export permit to a small Calgary company called Thompson Mitchell Ironworks, which also goes by the name CCR Energy Services. It was only the third such export permit issued by the NEB.

“CCR will be the first company in North America to ship LNG to Asia,” chief executive Bob Thompson said in an interview last year.

But if LNG is proving irresistible to a broad array of dreamers, it’s also showing the tenuousness of some of their plans, some of which are not – or at least, not yet – clearly grounded in solid commercial arrangements.

Thompson Mitchell, for example, is housed in a small building, mostly filled with a forklift shop, in an industrial area of southeastern Calgary. It has few staff, but big ambitions: the establishment of a Canadian Blue Corridor using LNG to fuel engines across a broad swath of the Western Canada. It plans to build a series of “micro-plants” that make LNG. “Our rollout plan is in five years, we’ll have 92 plants across the country,” Mr. Thompson said.

“I don’t care if I have to put it in a Thermos, jump on a plane and fly there. I want to be the first,” he said.

The company has never built an LNG operation before (it specializes in medical oxygen), although it says seven plants using its technology are running in Southeast Asia.

Mr. Suthanthiran, meanwhile, says he is spending about $1-million a year to maintain Kitsault and is keen to make it more than an eccentric hobby.

“There are a lot of [LNG] plans that are looking at using Kitsault as a staging area. We are saying, ‘Why go somewhere else? We can do it right here.’”

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