INNOVATION January-February 2013

f ea t ures

LNG Export from BC | Opportunities and Challenges Dr. Zoher Meratla, P.Eng.

stature of the developers. Given the current involvement of large operating companies with established track records in LNG and major Asian LNG importers already making large investments in gas production though, LNG export from BC is likely inevitable. Free of the geopolitical risks present in some the competing countries, closeness to Asian markets and a large pool of skilled labour give BC a distinct advantage. Energy intensive, LNG plants are not without environmental challenges. The BC regulatory framework is, however, considered one of the strictest. The front runner of the LNG projects under development, Kitimat LNG is the most efficient in the world, a good indication that LNG development in BC is on the right path. LNG in Canada A decade ago, the combination of limited supply and high natural gas prices prompted a number of companies in North America to pursue the development of LNG import terminals. In Eastern Canada, the front runner, Canaport LNG located in St. John, New Brunswick, proceeded with the construction and commissioning of the first Canadian LNG import terminal. Three import terminals were considered in Quebec. Both Rabaska LNG (near St. Levy) and Cacouna Energy (at Gros Cacouna port) completed front- end engineering design. The third one located at Grande Anse did not proceed beyond conceptual design. In British Columbia, WestPac LNG carried out preliminary engineering for an LNG import terminal at Ridley Island near Prince Rupert with transhipment to a satellite LNG facility on Texada Island. Galveston LNG focused on the Kitimat area. LNG import terminal development at Emsley Cove proceeded to completion of front-end engineering design. Site constraints and other issues led to relocating the project at Bish Cove, where the front-end engineering design was carried out by CDS Research. (The plant layout is illustrated in Figure 1.) As natural gas prices decreased and eventually collapsed in the subsequent

Introduction When cooled down to -160°C, natural gas becomes a clear liquid occupying 600 times less volume than its gaseous phase under standard conditions. The density of this liquefied natural gas (LNG) is approximately 440 kg/m 3 . Typically, LNG contains at least 95% C 1 with the rest made up of C 2 , C 3 , C 4 and N 2 depending on the feed gas composition. Over the past 30 years, the size of storage tank capacity has increased from 100,000 m 3 to 200,000 m 3 . LNG carriers in the 250,000 m 3 range are now being introduced. Stored at essentially atmospheric pressure, LNG offers the opportunity to deliver large quantities of natural gas to different parts of the world without a pipeline. The production of LNG for international trade started in 1964 with the Camel LNG plant in Algeria. Since then, LNG has become a major commodity traded internationally. Up to now, Canadian natural gas had only one market: the United States, which is currently developing its own LNG export due to abundant supply. With huge natural gas reserves yet to be developed, LNG production in BC presents great opportunities to access new markets commanding high natural gas prices. Capital intensive LNG projects will draw major investments into BC, not only for the liquefaction plants, but also for the support infrastructure such as pipelines, roads, power generation, transmission lines, gas production and shipping. The development of LNG export is expected to have a major economic impact in BC for at least 50 years. In addition to conventional use for heating homes and power generation, LNG is rapidly gaining market share as a transportation fuel. BC stands to benefit from the development of this infrastructure. With strong competition from other countries, BC faces, however, the challenge of establishing itself as a reliable and competitive LNG exporter. The pace of development depends on many factors including LNG experience and financial

Figure 1. LNG Import Terminal at Bish Cove – FEED Stage.

three years, it became clear that LNG import terminals would not be economical and as a result, none of the projects in BC or Quebec proceeded. After a lull in activity lasting a couple of years, Galveston LNG decided to pursue an LNG export facility at Bish Cove. CDS Research was retained to carry out preliminary front-end engineering design to develop the key elements of

Figure 2. LNG Export Terminal at Bish Cove – Pre-FEED Stage

the plant including process selection, energy and material balance, efficiency, environmental emissions and effluents, design basis, and compliance with siting requirements. A significant effort was dedicated to plant efficiency. (The plant layout based on a single liquefaction train is illustrated in Figure 2.)

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