No new LNG expansion pending from FortisBC on Vancouver Island

Firm says no deal in place with Alaskan applicant, existing Mt. Hayes plant near Nanaimo Airport not suitable for export proposal.

The Mt. Hayes liquified natural gas facility on Mt. Hayes northwest of Ladysmith. FortisBC says it has no plans to utilize it as part of an export proposal being made by an Alaskan firm.

FortisBC says it has no plans to build or supply a new liquefied natural gas operation on Vancouver Island now, or in the near future, or to expand its existing plant.

And any Island connections to a new LNG export proposal that surfaced earlier this month are tenuous at best.

Questions arose on the heels of a report the Alaskan firm Crowley Holdings had applied for an export permit to annually ship up 10 billion cubic feet of excess Canadian natural gas to foreign markets.

That application made reference to the FortisBC LNG storage plant on Mt. Hayes, southwest of the Nanaimo Airport, and led to internet speculation that something new was pending at or near that location.

According to Fortis corporate communications manager Michael Allison, that is not the case.

Allison acknowledged his company may have interest in striking a deal with Crowley at some point, but said no negotiations have taken place. Not only that, he added that any potential future deal would be focused on the expanding FortisBC LNG plant in Delta, not at Mt. Hayes.

“That facility (Mt. Hayes) is not designed for that. Any kind of new activity would be at our facility in Delta,” he said.

Crowley spokesman Matt Slevert confirmed the Mt. Hayes facility was included in its National Energy Board application because it is part of a network that could be used to help feed LNG exports, not because Crowley has immediate hopes to utilize the facility itself.

According to Allison, Delta’s Tilbury plant – operating since 1971 – and the Mt. Hayes plant are the only two LNG facilities currently operating in B.C. Unlike most LNG proposals currently dominating the headlines, they are focused on serving the domestic, not international, market.

Opened in 2011, the Mt. Hayes facility essentially works as a reservoir to ensure Vancouver Island has a long-term supply of natural gas on hand in the event of any service interruption or sudden peak in demand. It cools the gas to a liquefied state and can store up to a month’s supply for the approximately 100,000 Vancouver Island homes and businesses that FortisBC serves.

That network is fed by a pipeline that was built in the early ’90s. It travels under the ocean from Powell River to Comox, then splits – one arm snaking north to Campbell River, the other south through the Mt. Hayes facility and on to Greater Victoria.

The only active new LNG proposal for the Island at the moment is Steelhead LNG’s two-pronged plan to build plants at Bamberton below the Malahat on the Saanich Inlet and at Sarita Bay along the Alberni canal – each to serve the export market.

Steelhead has National Energy Board approval for a licence to export up to 30 million tonnes of liquefied natural gas per year over a 25-year period from the two proposed sites.

The Malahat plant has come under fire from some neighbours around Saanich Inlet, including area First Nations, who say it comes with too much environmental risk. In February, the Cowichan Valley Regional District – home of the existing Mt. Hayes facility — passed a motion it was opposed to any LNG facility being located at Bamberton or anywhere else within the regional district.

— with a file from Craig Spence

 

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