Canadian authorities approve C$11bn Pacific NorthWest LNG project

On Sept. 27, the Canadian Minister of the Environment and Climate Change Catherine McKenna and other officials announced the federal cabinet’s decision to approve the C$11 billion Pacific NorthWest LNG Project after a federal environmental assessment process.

The project represents one of Canada’s largest resource development projects with a total capital investment of up to C$36 billion when accounting for upstream natural gas development. During construction, the project will create an estimated 4,500 jobs and an additional 630 direct and indirect jobs during the operation of the facility.

The project is subject to over 190 legally binding conditions, determined through extensive scientific study, that will lessen the environmental impacts. For example, Pacific NorthWest LNG Ltd. will be required to comply with mitigation measures that will minimize adverse effects on fish, fish habitat, marine mammals, wetlands, migratory birds, and human health.

The Canadian Environmental Assessment Agency conducted extensive consultations throughout the environmental assessment and also provided four formal opportunities for public comments and input. Over 34,000 comments were received from individuals and groups on the draft environmental assessment report.

The decision imposes – for the first time ever – a maximum cap on annual project greenhouse gas emissions. This cap means direct greenhouse gas emissions from the project will be capped at a maximum of 4.3 Mt of CO2e per year, 900,000 tonnes less than what had initially been proposed by the proponent. In addition, upstream emissions will be reduced by the government’s commitment to regulate methane emissions from the oil and gas sector, and by British Columbia’s plan for electrification of upstream extraction of natural gas.

“The Pacific NorthWest LNG Project will deliver thousands of good middle-class jobs and will help pay for schools and roads and social programs that enrich people’s lives. We are moving forward with natural resource development in a sustainable manner, because we have an obligation to leave the planet in better shape than we found it. This is an exciting day for British Columbia, for Canada and for the natural gas industry in this country,” said Jim Carr, Minister of Natural Resources.

“The only way to get resources to market in the twenty-first century is if they can be done in a responsible and sustainable manner. This decision reflects this objective. With the legally binding conditions we are putting in place and with British Columbia’s commitment to increase its price on carbon in line with the Pan Canadian Framework, I am confident that we will minimize the environmental impacts of the project and ensure that it proceeds in the most sustainable manner possiblw,” said Catherine McKenna, Minister of Environment and Climate Change

Pacific NorthWest LNG LP is proposing the construction, operation, and decommissioning of a new facility for the liquefaction, storage, and export of liquefied natural gas. The Pacific NorthWest LNG Project is proposed to be located primarily on federal lands and waters administered by the Prince Rupert Port Authority approximately 15 kilometers south of Prince Rupert, British Columbia. At full production, the facility would receive approximately 9.1 x 107 cubic meters per day of pipeline-grade natural gas and produce up to 20.5 million tonnes per year of liquefied natural gas for over 30 years. The project also includes the construction, operation, and decommissioning of a marine terminal for loading liquefied natural gas on to vessels for export.

The project consists of:

  • LNG Trains – Each train would consist of a feed gas receiving unit, pressure let down unit, gas treatment unit, gas dehydration unit, mercury removal unit, heavies removal unit, and liquefaction unit. The facility would contain up to three identical 6.8 million tonnes per annum liquefaction trains. Refrigeration compressors for liquefaction would be powered by aero derivative gas turbines.
  • LNG Storage – Up to three 180 000 m3 full-containment LNG storage tanks would be constructed.
  • LNG Loading (Marine Terminal) – The terminal would consist of a 2.7 kilometer jetty that includes a 1.6 kilometer clear-span suspension bridge and a 1.19 kilometer conventional pipe pile trestle extending west from Lelu Island to the marine terminal berths beyond Agnew Bank. The trestle and topside infrastructure would include a field control room, insulated cryogenic piping, pumping equipment, and LNG loading infrastructure. The marine terminal berths would be capable of berthing 217 000 m3 LNG carriers up to 315 meters in length. LNG from the storage tanks would be pumped to the marine terminal berths and then loaded into the ships by marine loading arms.
  • Utilities and Offsite Facilities – To support the operation of the LNG facility, the following components would be required: flare system for managing release of gas in testing and emergency situations; electrical power supply for process pumps, cooling fans, and lighting; bulk storage; water supply infrastructure; waste water treatment systems (upgrade and use of existing system on mainland); storm water management infrastructure; fire control infrastructure; and compressed air and nitrogen generation systems.

The project approval does not include pipeline transportation of natural gas from gas fields in northeast B.C., which would be provided by the Prince Rupert Gas Transmission Project, proposed by TransCanada Pipelines Ltd.

Two alternatives were evaluated for electrical power: onsite generation and offsite generation. The key feasibility criterion for selecting the source of electrical power was availability and certainty of supply from BC Hydro at the time of commissioning of the project. The project developer determined that BC Hydro would not have enough available electricity to supply the plant that would be consistent with the project’s timeline and reliability needs comparable to in-house generation. Further, BC Hydro advised the proponent that it would likely need to provide a source of electrical energy to service the project’s power requirement and that source was likely a natural gas-fired electrical thermal energy facility in the Prince Rupert area in combination with supply from the main electrical grid.

To meet its optimal and aggressive schedule, the proponent needed to firm up the Basis of Design for the LNG Plant, including power options, to advance aggressively to the Front End Engineering and Design Phase in May 2013. The proponent believed there would be minimal environmental benefits to using power from BC Hydro compared to on-site generation. Depending on the mix of grid and thermal power, the emissions could be similar and there would be additional environmental costs from the footprint of the required power supply plant and transmission lines. On-site power generation from gas turbines was selected as the preferred option by the proponent. The proponent continues to commit to third-party external power for non-essential loads when renewable energy sources are more mature, the electrical power is available and meets the proponent’s reliability requirements, and the LNG Plant Trains 1 and 2 have been commissioned and are operating.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.