Skip to main content

A model at the LNG Canada offices in Kitimat, B.C., on June 26, 2014, shows the proposed liquefied natural gas plant and marine terminal. The Rio Tinto Alcan aluminum smelter is in the background.

Robin Rowland/The Canadian Press

BC Hydro and LNG Canada have reached an agreement for the provincial utility to supply power for a proposed liquefied natural gas export facility in Kitimat.

The deal is the first to be signed under a new price regime announced on Tuesday. It highlights the question of where the electricity for the LNG industry will come from if even some of the facilities proposed in the province go ahead.

The arrangement means BC Hydro would supply 20 per cent of the power that LNG Canada, a Shell Canada-led joint venture, would need to run an export facility in Kitimat.

Story continues below advertisement

That power, along with electricity required for the $400-million expansion of the existing FortisBC LNG facility in Delta, would come close to the total set aside for LNG facilities in BC Hydro's most recent plan.

When the electricity required for those two projects is taken into account, "we are up very, very close to what BC Hydro forecast for LNG demand in the Integrated Resource Plan that we announced last fall," provincial Energy Minister Bill Bennett said on Tuesday in a conference call.

That plan included 3,000 gigawatt hours for initial LNG-related capacity.

But with an estimated 2,000 gigawatt hours going to LNG Canada, and with the FortisBC project using e-drive – a technology that employs electricity rather than natural gas in the production process – "you'll essentially be at least coming close to using up that 3,000 gigawatt hours," Mr. Bennett said.

If two large LNG proposals move ahead, BC Hydro would likely need to produce or find some more electricity, Mr. Bennett said.

Currently, more than a dozen LNG projects are seeking approval. The Integrated Resource Plan says B.C. will need new energy by 2024, assuming an initial LNG load of 3,000 gigawatt hours.

Under the new power rates announced on Tuesday, LNG customers will have to pay more for electricity than existing industrial customers. No LNG proponents balked at that, Natural Gas Minister Rich Coleman said on the call.

Story continues below advertisement

"We've had no indication that this is a difficult number for anybody," he said.

Potential electricity demand would depend on the location of new facilities, Mr. Coleman added. LNG plants in Kitimat, for example, could connect to the provincial electricity grid, while plants in other places – such as Prince Rupert – are expected to depend more on natural gas.

B.C. announced its electricity rules for the LNG sector as it is mulling whether to build Site C, a Peace River dam that would produce about 5,100 gigawatt hours of electricity a year.

Opponents of that project, which is expected to cost about $7.9-billion, have questioned whether it is needed.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies