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FortisBC wants to expand it to serve commercial and industrial truck fleets, rail and possibly BC Ferries vessels.CHAD HIPOLITO/The Globe and Mail

The B.C. government has made regulatory changes designed to help the province's transportation sector switch to liquefied natural gas, paving the way for a $400-million expansion at an existing LNG facility.

FortisBC's Tilbury LNG facility has been operating in Delta since 1971 – it is one of two LNG plants in the province, and the oldest. Both produce for domestic customers, but the company wants to expand it to serve commercial and industrial truck fleets, rail and possibly BC Ferries vessels.

The proposed expansion at Tilbury would be exempt from a regulatory review by the B.C. Utilities Commission, Energy Minister Bill Bennett said on Thursday. It is part of a package of changes designed to sweeten the deal for Fortis, which should make LNG or compressed natural gas more attractive as a transportation fuel in B.C.

"What we have done is enable Fortis to bring LNG to the transportation sector as a clean, green fuel," Mr. Bennett said in an interview. The province made changes last year to offer incentives to the transportation sector that resulted in fuel-switching agreements for 150 vehicles to make the transition to compressed natural gas from diesel. Those incentives will be expanded to include rail and mining industry vehicles. Greenhouse gas emissions from natural gas are as much as 30 per cent less than diesel.

FortisBC has not made a final decision on the expansion, but Mr. Bennett said the the changes were needed to help tip the scales in favour of the project. "There are some very large trucking companies that are about to order new fleets; they can decide to buy trucks with engines that run on LNG. And BC Ferries is poised to buy new boats, so they will now be able to decide if LNG fuel is the right choice."

If the project goes ahead, FortisBC expects the Tilbury plant to provide LNG fuel by mid-2016.

"This announcement will also result in increased LNG supply, creating opportunities for industrial users and remote communities, bringing economic development and new jobs to B.C.," John Walker, president and CEO of FortisBC, said in a statement on Thursday.

"Government's announcement, also positions FortisBC to move forward immediately with plans to expand our Tilbury LNG facility. This project contemplates an investment of up to $400-million," he said.

The Tilbury facility, like the Mount Hayes plant on Vancouver Island, takes natural gas during low demand periods in the summer and converts it into a liquid that can be stored.

The gas is chilled to minus-160 C, at which it becomes a liquid that is 600 times denser than gas. Fortis uses electric-drive compressors to run its relatively small plants – large export facilities proposed for the B.C. coast are expected to burn natural gas as their primary source of energy.

The liquid is pumped into storage tanks that keep it cold enough to remain liquid until needed. This allows Fortis to stash energy for the winter. When the gas is needed, it is pumped out and run through vaporizers to restore it to its original state, before flowing back into the pipeline system.