An American energy company is backing a bid to obtain a Canadian licence to export liquefied natural gas from the Tilbury LNG plant in Delta, B.C.
WesPac Midstream LLC filed its application for a 25-year export licence to the National Energy Board, saying it wants to ship as much as 3 million tonnes a year of LNG to foreign customers in markets such as Asia, the United States, Central America and South America.
There are now 15 B.C. LNG export projects in the works, with most of them focused on terminals to be built in northwestern British Columbia.
Besides WesPac, the only other proposal in the Lower Mainland is targeted for the Squamish area. Woodfibre LNG, privately owned by Singapore-based RGE Pte. Ltd., received NEB approval in December for its 25-year licence to export 2.1 million tonnes annually of LNG from an industrial site near the community of Squamish.
FortisBC operates the Tilbury Island plant, which already was slated for a major expansion long before WesPac’s application. Delta Mayor Lois Jackson said recently that she is a supporter of FortisBC’s $400-million expansion plans at the 43-year-old Tilbury site.
“LNG is currently produced at the Tilbury LNG plant for sale in both local British Columbia markets and regional markets, including truck-based exports to the United States by other parties,” according to the application filed by WesPac through its Canadian unit.
Some energy supplies from Tilbury’s storage are already trucked lengthy distances to domestic markets such as Watson Lake, Yukon.
FortisBC also uses the Tilbury operation to supplement natural gas supplies during peak times in the Lower Mainland. Yet another expansion of the plant would enhance WesPac’s long-term vision to be a reliable exporter. The timing for a new stage of expansion beyond the current plans will hinge on market demand for LNG exports.
“Obtaining the requested licence is an important step in the development of the WesPac LNG Marine Terminal and further expansion of LNG export production capacity at the Tilbury LNG plant,” WesPac said. “Subject to the receipt of all necessary permits and approvals, construction of the WesPac LNG Marine Terminal is scheduled to begin in 2015, with completion targeted for late 2016.”
British Columbia faces fierce global competition to export LNG, notably from rival projects in Australia and the United States. Industry observers say the province is also in a race against time as new supplies pour into Asia over the next six years, and it is crucial for B.C. LNG projects to start construction within a couple of years to capture market share.
WesPac believes it will be able to find sufficient natural gas supplies in Western Canada to feed its LNG terminal. “Preliminary discussions indicate that sufficient pipeline capacity is currently available on the Spectra system from northern British Columbia to the Vancouver area,” WesPac said.
So far, the National Energy Board has approved 11 LNG export applications. Nine of those projects are proposed for British Columbia while two have Oregon terminals envisaged.
Industry experts say it is realistic to expect four B.C. LNG projects at most to come to fruition.