LNG Terminal & Power Plant on Texada Island

New CDN$2 Billion LNG Terminal & Power Plant Announced for Texada Island
News Release, WestPac LNG Corporation, 31-Jul-2007

$2 billion project
Scott Simpson, Vancouver Sun, 31-Jul-2007

Texada Island project could reshape B.C. energy sector
Scott Simpson, Vancouver Sun, 01-Aug-2007

WestPac changes plan for LNG terminal
Wendy Steuck, Globe and Mail, 01-Aug-2007

Gas project merits closer scrutiny
Editorial, Times Colonist, 02-Aug-2007

Gas power plant proposed
Tom Fletcher, Black Press, 03-Aug-2007

Power play
Editorial, Campbell River Mirror, 03-Aug-2007

Union opposed to LNG plant
Ashley Ford, The Province, 03-Aug-2007

COMMENT: From the get-go, this proposal has two fundamental problems:

2. The 2007 Energy Plan said essentially that new generation in BC wouldn't generate greenhouse gases. A new gas-fired plant would do nothing else but generate greenhouse gases and electricity. In effect, this is no different than the Duke Point Generation Plant - canceled by BC Hydro and the BC government in 2005 because of the rising cost of natural gas

WestPac LNG Corporation
Jul 31, 2007

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 31, 2007) - WestPac LNG Corporation today announced a $2.0 billion combined liquefied natural gas (LNG) import terminal and natural gas-fired power generation facility that signals an important shift in its strategy to meet the future energy needs of BC coastal and Vancouver Island residents.

"We believe LNG offers significant benefits to the people of BC and we have a unique opportunity to enhance these benefits by adding power generation at our proposed LNG terminal on Texada Island," said Mark Butler, president of WestPac. "The existing natural gas and power infrastructure on Texada and the opportunity of a power generation facility make a strong business case."

The Texada LNG facility will provide benefits to BC and coastal region residents including:

- new stable, secure supply of natural gas;

- provision of LNG as a clean-burning fuel option for vehicle fleets and remote BC coastal communities;

- additional energy opportunities without the need for significant new pipeline or transmission line construction;

- enabling the possible decommissioning of the Burrard Thermal power station and provision of alternate electricity supply from a new highly efficient facility away from densely populated areas;

- alleviation of BC power deficit and enhancing electricity self-sufficiency; and

- up to 75 full time jobs and more than 300 jobs during construction.

"Natural gas is a key component for meeting today's growing power and energy demand. Together with the power generation plant, LNG will play an important role as part of the solution to BC's current and forecast power deficit," Butler said.

WestPac has acquired a long-term lease at Kiddie Point, at the north end of Texada Island. Located in an industrial area adjacent to an existing limestone quarry, the site can provide a safe, deepwater berth for LNG vessels as well as access to existing energy infrastructure, such as the Vancouver Island gas pipeline onsite and nearby connection to BC Hydro's power grid through the existing power line crossing Texada Island and supplying electricity to Vancouver Island. Because this infrastructure is already in place, the proposed site is ideal for providing power generation and a secure source for natural gas with minimal environmental impact.

"When built, our terminal will provide the coast, Vancouver Island and the Lower Mainland with access to a reliable supply of natural gas that should contribute to future economic development and power possibilities in the region," says Butler.

The project supports the goals expressed in BC's Energy Policy, by contributing to provincial electricity self-sufficiency and by enabling wind, run-of-river hydro and other renewable power sources. This is accomplished by providing power at times when intermittent solutions such as run-of-river or wind-generated power are not available ("firming").

Facilities at the Texada site will include

- a marine jetty and berthing facility

- onshore LNG storage tanks

- a natural gas-fired power generation facility

- interconnection with the existing Terasen natural gas pipeline from the mainland to Vancouver Island on site

- a short 500 kiloVolt interconnection line to the existing BC Hydro transmission line between the mainland and Vancouver Island.

WestPac has conducted preliminary meetings with local community representatives to outline its strategy to support existing industry and enable future economic development in the BC coastal region.

An in-depth analysis of the LNG terminal and power generation facility will be undertaken through detailed environmental assessment and regulatory reviews of the project. The proposed terminal will be designed and constructed to Canadian and international standards for LNG facilities and there will be an extensive public consultation process. "We will actively consult the community and are committed to treat any concerns with thoughtful regard and consideration," adds Butler.

The Texada Island Project could also enhance air quality in the Fraser Valley by allowing BC Hydro to decommission its Burrard Thermal power generator, which it currently depends on for peak-demand power supply.

"The new facility will help meet future demand for natural gas in BC at a time when gas reserves are decreasing and power costs are increasing," said WestPac Board member Geoff Plant. "We hope the BC government will agree that we will offer new and flexible energy options for the province by allowing power generation using natural gas that can be imported economically."

Declining production of natural gas in Canada and the US, combined with a rapidly increasing demand for clean-burning, environmentally-acceptable natural gas has led to growing demand for natural gas imports. LNG is safely transported in specially insulated double-hulled vessels and pumped into full containment storage tanks on land for later regasification and delivery to consumers, business and for power generation. WestPac expects that about one LNG vessel will deliver LNG to Texada Island every ten days for re-gasification and distribution through the existing natural gas pipeline system.

LNG facilities are not new to British Columbia. An LNG production and storage facility has operated on Tilbury Island in Delta since 1971 without incident. An LNG receipt terminal proposed to be located near Kitimat, BC recently received environmental approvals. In addition, four other proposed LNG receipt terminals have been approved elsewhere in Canada within the last three years.

WestPac has been conducting environmental assessment work for a proposed LNG receipt and transshipment terminal at Ridley Island location near Prince Rupert. While the Ridley facility will not proceed immediately, Butler said the location could still play a future role as a second terminus to serve the north coast when demand for natural gas reaches new levels.

Liquefied natural gas is created by cooling natural gas into a liquid state at a temperature of minus 162C. This reduces the space natural gas occupies by 600 times, making it practical for transport and storage. LNG has been safely transported by ship, truck and rail car for more than 50 years. More than 33,000 ship cargos of LNG have been safely transported over a combined distance of 60 million miles without serious incident. Annually, more than 150 ocean tankers safely transport more than 110 million tonnes of LNG, a volume greater than all natural gas consumed in American homes each year.

For more information, please contact
WestPac LNG Corporation
Mark Butler
President
(403) 770-6027

or

WestPac LNG Corporation
Jeff Domansky
Vice President, Communications
(604) 689-5559 or Cell: (604) 880-8569
Website: www.westpaclng.com

or

Peak Communicators
Alyn Edwards
(604) 689-5559 or Cell: (604) 802-7139

WestPac LNG News Release

$2 billion project

Texada Island was proposed today as the site of an ambitious $2 billion energy project incorporating an import terminal for liquid natural gas and a 600-megawatt electricity generating station.

WestPac LNG Corporation made the announcement in Vancouver, saying the project would meet future energy needs of residents of coastal B.C. communities as well as Vancouver Island residents.

The LNG (liquid natural gas) facility would be one of the first of its kind on the western coast of North America, serving as a receiving terminal for ships bringing in gas from other nations, possibly including Russia and Saudi Arabia.

The facility would be served by one ship coming in about every 10 days.
The gas-fired thermal generating station would be located alongside the LNG terminal and would be fed by the imported gas.

WestPac president Mark Butler said there would be enough surplus gas to help supply Terasen's Vancouver Island natural gas pipeline, which already runs down Texada.

Butler said it would be relatively easy for WestPac to link onto the British Columbia electricity grid - there is a BC Transmission Corporation 500 kilovolt transmission line already strung across Texada, connecting Vancouver Island to the B.C. mainland.

It will take at least two years to complete the project, Butler said.
It will require federal and provincial environmental approvals, approval from the B.C. Utilities Commission, a power sales contract with Hydro and a partnership with Terasen - as well as community support in Texada and Powell River, the latter of which serves as the seat of local government for the Sunshine Coast Island.

The company also announced it is shelving its plan for a stand-alone LNG terminal at Ridley Terminal in Prince Rupert, saying the cost of the project had risen from $300 million three years ago to more than $1 billion, and that it would now focus exclusively on the Texada project.

© Vancouver Sun

An ambitious $2-billion megaproject with the potential to reshape the British Columbia energy sector was announced Tuesday by a Calgary-based private company.

WestPac LNG Corp. wants to build a terminal for liquefied natural gas, or LNG, on Texada Island in the Strait of Georgia and build a 600-megawatt electricity generating facility alongside.

It's the second such proposal in less than a week.

Last Friday, Calgary-based Kitimat LNG announced it is talking with prospective partners about a 250-megawatt to 500-megawatt generating facility to complement an LNG terminal it envisions for Kitimat on the B.C. central coast.

About 40 LNG terminals have been proposed for construction along the Pacific coast between Alaska and Mexico because domestic sources of gas are running out.

The import gas would come in compressed, liquefied form in tanker ships from places such as Russia and Saudi Arabia, albeit without the catastrophic ocean risks associated with oil spills because LNG evaporates as it warms.

The Texada facility would be served by one ship coming in about every 10 days.

One LNG terminal is nearing completion in Mexico, while 13 are mired in regulatory processes along the U.S. coast.

The Texada generating facility, fired by gas coming from the terminal, would become the single largest independent source of electricity in B.C. since Alcan's Kemano project was completed over 50 years ago.

At full power, a 600-megawatt facility would generate enough electricity to power 450,000 homes.

WestPac president Mark Butler told a news conference in Vancouver that WestPac is shelving plans it announced in 2004 for a LNG terminal at Prince Rupert in favour of the bigger Texada project.

He said it'll help answer BC Hydro's call to meet growing demand for electricity with new, private sector sources of power.

The relationship between the two facilities is symbiotic -- waste heat from the power plant would warm the LNG back into a gas, while the chill of the liquefied gas would help the generating turbines operate more efficiently.

The project requires a long and complicated series of government and other approvals before it can proceed, and construction could be underway in about two years if there are no major snags.

Butler admitted the private company, which boasts former B.C.
attorney-general Geoff Plante on its board of directors, will need to raise money to build it.

He said the logistics are sound because Texada, an industry-friendly island that is the site of past and present mining operations, has in place the energy infrastructure to support economical gas and electricity connections for WestPac's projects.

Texada is already the site of a Terasen Gas pipeline that carries natural gas to Vancouver Island, and Butler said he believes WestPac could link its LNG terminal to that line.

Texada also offers a link to a 500-kilovolt BC Transmission Corp.
power line that runs above-ground across the island as part of a major electricity connection between the B.C. mainland to Vancouver Island.

The Westpac project will require federal and provincial environmental approvals, approval from the B.C. Utilities Commission, a power sales contract with Hydro, a connection agreement with BC Transmission, and a partnership with Terasen -- as well as community support in Texada and Powell River, the latter of which serves as the seat of local government for the area.

WestPac has not formally approached any of the utilities, all of whom had only a few general comments about the project.

BC Hydro said WestPac would have an opportunity to bid on the Crown corporation's next call for power.

BC Transmission said it would comment at such time as it receives an interconnection request from WestPac.

Terasen Gas spokesman Scott Webb said the gas utility has not examined the proposal in detail.

"We certainly look forward to working with WestPac. I know there are a number of companies looking at terminals along the B.C coast and we're going to work with them to meet the energy demands of B.C."

Dave Murphy, Texada Island director for the Powell River regional district, said residents learned details of the project on Monday.

WestPac officials had previously discussed the Ridley project with the community because it included a link to Texada, but Murphy said the double-barrelled project is a new development.

He said residents would probably welcome the new jobs, but said it's not clear how much of a strain the project would put on local services at Texada and Powell River during its construction phase.

Murphy said WestPac won't have the confidence of the community until it can demonstrate it'll be beneficial to the area.

"They are going to have to alleviate any fears that our neighbors are going to have about safety and all of that," he said. "They've got an uphill battle to try to get us all on side."

Liquid natural gas, when regassified as methane, is an exceptionally clean burning fuel that's more or less free of pollutants. But a gas-fired plant will still contribute to one of the biggest problems confronting the planet -- greenhouse gas emissions that climate scientists say are contributing to global warming.

The B.C. government has not ruled out gas-fired electricity generation -- although it has a moratorium on development of coal-fired generation until technology has been developed to capture the emissions.

The energy plan announced earlier this year by B.C. Energy Minister Richard Neufeld requires any new generation source to fully compensate for greenhouse gas emissions.

That means the 600-megawatt plant envisioned by WestPac will need "net-zero" greenhouse gas emissions to qualify in a Hydro call for power -- possibly through the purchase of carbon credits -- to offset the impact of the emissions.

"We're not able at this stage in the process to state what exactly our emissions will be. We are aware of the energy policy. We will be working with the government as they flesh out and develop how that policy will be implemented," WestPac vice-president Celesa Horvath said.

Plante said B.C. needs "firm" sources of electricity to complement intermittent green sources such as run of river hydro, solar and wind, and the WestPac gas plant could also support decommissioning of the aging and inefficient Burrard thermal gas-fired generating plant in Port Moody.

"It represents a $2-billion private sector investment in British Columbia and that's something worth getting excited about," Plante said.

"B.C. has outgrown the capacity of our heritage assets. Every alternative for meeting our future electricity needs involves choices. This project offers an option which will help us meet those needs within a framework that is safe, secure and sustainable."

ssimpson@png.canwest.com

VANCOUVER -- WestPac LNG Corp. has shelved plans for a $350-million liquefied natural gas terminal in Prince Rupert, B.C., as a result of spiralling costs, but has come up with a plan B: a $2-billion LNG terminal and power plant on Texada Island in the Strait of Georgia.

The new plan is more economic because it piggybacks on existing pipeline infrastructure and includes a power generation component, Mark Butler, president of Calgary-based WestPac, said at a press conference yesterday in Vancouver. And, he maintained, the project would go a long way toward helping B.C. meet its goal of becoming more energy self-sufficient.

"The wind does not always blow and rivers do not always run," Mr. Butler said, referring to the provincial government's emphasis on green, renewable energy sources such as wind and small hydro projects in this year's energy plan. "Our project would provide firming capacity that would complement those green projects."

At the same time WestPac unveiled its Texada proposal, the company said it was putting a proposed terminal near Prince Rupert on hold because of rising costs for materials including nickel and steel.

WestPac had been working on that plan since 2004 and said it could be revived in the future.

WestPac's Prince Rupert proposal had been one of nine multimillion dollar projects under way in Canada to import LNG, according to a May, 2007, report by Natural Resources Canada.

North America has historically relied on indigenous gas supplies, but with reservoirs being depleted and ever more drilling required to maintain production levels - and natural gas demand showing no signs of slowing down - energy companies are rushing to build projects that would bring LNG from places such as Malaysia and Indonesia to North American markets.

LNG is created by cooling natural gas until it is in a liquid state, making it feasible to ship and store.

There are currently more than 60 projects to import LNG on the books in North America, says the Natural Resources Canada report.

Canada does not yet import LNG. Projects in Atlantic Canada are being designed to serve the U.S. Northeast, Quebec projects would supply Eastern Canada and the B.C. proposals would supply natural gas to consumers on Vancouver Island and the Lower Mainland, the report says.

WestPac's revised proposal, which would require approvals from both federal and provincial governments, raised eyebrows among critics that have environmental and safety concerns in relation to LNG projects on the West Coast.

"I think it's absolutely ridiculous - the idea of allowing LNG tankers to come into the Georgia Strait," said Oonagh O'Connor, a spokeswoman for Living Oceans Society, adding that the area is packed with marine traffic.

Ms. O'Connor also expressed doubts about whether the busy shipping channel would be able to accommodate the two-mile buffer zones some regulatory authorities require for LNG tankers.

WestPac has studied traffic in the area and its research shows that the company's expected shipments - about 36 tankers a year - would amount to an increase of less than 1 per cent of existing marine traffic, Mr. Butler said in a follow-up interview.

And the company's research also shows that it could maintain exclusion zones around its vessels that would meet international standards, he said.

Pending regulatory approvals, the project could be in service by 2013, WestPac said. The company has entered into a co-development agreement with an independent power producer, Mr. Butler said, but he would not provide additional financial details.

As WestPac revamps its project, Calgary-based Kitimat LNG Inc., the proponent of the other LNG project in B.C., has obtained key federal and provincial approvals and is the only LNG terminal on the West Coast of Canada or the U.S. that is fully permitted.

"We certainly see a first-mover advantage in that regard," Kitimat LNG president Rosemary Boulton said yesterday.

Editorial
Times Colonist
August 02, 2007

The province needs to give very careful consideration to the proposal to build a liquefied natural gas terminal and power-generation facility on Texada Island.

The idea is not without some merit. Natural gas is the most efficient fuel source for electricity generation, and B.C.'s production of gas has been static since 2001, despite a doubling in the number of wells drilled. As our reserves inevitably dwindle, new sources must be found, and imported liquefied natural gas has proven to be the most practical system for filling that gap.

No one wants power generation facilities near their home, but few are willing to do without the convenience of electricity, either. Rationalizing these differing goals requires creative solutions.

Advocates of "clean power" suggest hydroelectricity as one possibility, but the environmental implications of flooding a valley -- not to mention building the subsequent hundreds of kilometres of transmission lines -- create their own set of problems.

Likewise, although wind farms are promoted as a non-polluting source of energy, very few people actually want to have a set of giant turbines in their immediate vicinity.

Concerns have also been mounting over the turbines' effect on birds and other wildlife.

Texada Island, with the B.C. Hydro transmission line and the Island's natural gas pipeline, is already a hub for both power and gas. And the northern tip of the island, where the facility is proposed, is home to the Blubber Bay limestone quarry, the second-largest in Canada -- hardly an unspoiled wilderness.

The most significant downside to the plan is that any increase in tanker activity in the Strait of Georgia is going to face intense scrutiny from environmentalists and the public.

Turning one of the Gulf Islands into an international port for highly flammable and explosive fuel isn't going to be an easy sell.

The project still requires federal and provincial environmental approvals, approval from the B.C. Utilities Commission, a power sales contract with B.C. Hydro and a partnership with Terasen Gas.

It's got a long way to go.

The bottom line for the province is that with rapid growth in population comes an increased need for power, which has to come from somewhere. Transmission lines become increasingly less efficient as distances increase, so it needs to be generated fairly close to where it's consumed.

Whether that generation takes place on Texada or not will be up to the people of the area and the various regulators. There are valid arguments on both sides.

We urge the government to take its time and give this project a thorough review, including public hearings, to ensure concerns around the proposal are fully explored.

A $2 billion project combining a liquefied natural gas import terminal and a power plant has been proposed for Texada Island, off B.C.’s Sunshine Coast.

WestPac LNG Corporation says the proximity of the Vancouver Island natural gas pipeline and power lines to deep-water access at the north end of the island make it suitable for the development.

Because of these advantages, the company is suspending an LNG port proposal for Ridley Island near Prince Rupert and focusing on the Texada Island location.

The plan calls for two LNG storage tanks with a capacity of more than 300,000 cubic metres of liquid gas, and the passage of 36 ships each year to bring in LNG from Southeast Asia, the Pacific Rim or the Middle East.

WestPac president Mark Butler said in an interview the project fits well with the B.C. government’s latest energy plan, which requires the province to achieve electricity self-sufficiency by 2016.

A gas-fired plant would produce up to 1,200 megawatts of firm, on-demand power that would be able to back up intermittent sources such as wind and run-of-river hydroelectric power.

The energy plan also called for all existing and new gas-fired plants to offset their carbon dioxide emissions. Announcing the new policy in February, Energy Minister Richard Neufeld said that could mean planting trees or building other clean energy projects.

Butler said his company has been advised that the rules around acceptable carbon offsets won’t be known until the fall of 2008, but his preference would be to allow WestPac to offset its emissions by building run-of-river hydro capacity.

“We believe that would be an ideal implementation program for British Columbia,” he said. “If the supply gap in B.C. is to be substantially filled by run-of-the-river or by biomass or by wind, all of which are intermittent supply, the need will exist for firm infrastructure.”

Part of the environmental pitch for the Texada plant is that it would allow BC Hydro to shut down the aging, inefficient Burrard Thermal gas-fired power plant in Port Moody.

That plant remains a key source of backup power for the Lower Mainland, although BC Hydro has planned to shut it down by 2015.

If approved, the Texada project would be the second LNG port to get the go-ahead on B.C.’s west coast.

Kitimat LNG Inc. of Calgary received federal and provincial environmental approval last year for would be the first LNG port on the west coast of North America.

WestPac notes that while imported LNG is new to B.C., the product is not. An LNG production and storage facility has operated on Tilbury Island in Delta since 1951.

The company says the project would generate more than 300 construction jobs, and then 75 full-time jobs after completion in 2013.

The 115-acre site is at Kiddie Point on Texada Island, 80 km north of Vancouver.

The island has about 1,100 inhabitants, as well as limestone quarries and logging operations.

What makes you more uncomfortable:

A) The thought of 36 tanker vessels carrying liquid natural gas, making annual round trips past Campbell River?

B) or the fact that a 600-megawatt liquid natural gas power plant would increase the amount of greenhouse gases released into the atmosphere?

Those are the likely realities if natural gas-fired power plant is built on Texada Island. The $2 billion project was proposed this week and already critics – NDP and BC Hydro union employees – are saying it's a bad idea.

The proponent, WestPac LNG Corporation, says the project will create jobs and provide much-needed energy for a growing B.C. economy. They also claim it will help the province reach its goal to become energy self-sufficient by 2016. Now that's a stretch as the liquid natural gas would come from Russia, Asia and the Middle East. If we, as a society, are truly interested in self-suffiency, we should maintain our dams and reservoirs, support run-of-the-river, wind and tidal power projects, and further support biodiesel initiatives.

Biodiesel generators are one the best ways to become self-sufficient in a growing economy, but it is hardly ever mentioned by government and we have to wonder why. Canada could be a world-leader in biodiesel production and most of the infrastructure is already in place in order to safely produce and transport this clean-burning fuel.

Instead we cater to big business by building oil sands projects, new pipelines and pour hundreds of millions into fuel cell technology – all of which contribute to the degradation of our environment.

Ashley Ford
The Province
August 03, 2007

A proposed LNG plant for Texada Island is already generating "gas" of a different nature with opponents venting against the development. The harshest criticism is coming from the union representing workers at B.C. Hydro.

The Canadian Office and Professional employees Union Local 378 described the $2-billion project yesterday as "too dangerous, too expensive and too dirty."

"Just one week after a pipeline rupture in Burnaby sent a geyser of oil spewing into the air and gushing into Burrard Inlet, how could anyone look British Columbians in the eye and tell them that is a good idea for a fragile ecosystem like the Strait of Georgia," said union vice-president Gwenne Farrell.

Earlier this week, Calgary-based WestPac LNG said it wants to build the terminal and a 600-megawatt, gas-fired power plant at the northern tip of the island.

It says it would create about 80 full-time jobs and the liquid natural gas would be shipped in from Asia and the Middle East.

Farrell, who is also a senior financial analyst at Hydro, said "this region is one of B.C.'s treasures and home to a variety of whales, dolphins, eagles, otters, deer and what remains of our wild salmon. Why would anyone want to risk spoiling this for a constant flotilla of dodgy supertankers in Georgia Strait?"

Farrell is also scornful of the provincial government and asks why Victoria would allow such a "potentially catastrophic project" to proceed?

"The answer is simple: WestPac and the B.C. government are not seeking to serve B.C.'s energy needs at all. Instead, they are trying to make a windfall profit by selling this dangerous, dirty energy to the U.S., environmental consequences be damned," she says.

Farrell may only be the tip of growing opposition.,

The NDP also weighed into the fray, with NDP MLAs Shane Simpson and Gary Coons questioning the project.

"Such a terminal means that there will be more tankers in the Strait of Georgia, which throws the current moratorium on tanker traffic in B.C. coastal waters into question," said Simpson, the party's environmental critic.

"There is very strong evidence that the Campbell Liberals are in favour of more tankers in B.C. waters. It is time that [Premier] Gordon Campbell comes clean and share his plans for the Georgia Strait and our coastal ecosystem with British Columbians," they said.

WestPac president Mark Butler has said placing the facility on Texada Island makes sense because it can tap into an existing natural-gas pipeline and transmission lines.

He said LNG ships are safe, noting there have been 33,000 sailings since the vessels were first launched 40 years ago without a single accident.

LNG may be controversial but it is growing in importance as a fuel source for an energy- hungry continent.

The U.S. Federal Energy Regulatory Commission, the independent agency that regulates interstate transmission of electricity, natural gas and oil and reviews proposals to build liquefied natural gas terminals, lists 29 approved LNG projects in Canada, U.S. and Mexico with another 16 waiting.