New B.C. Rules Boost Production of LNG

SURREY, BC— The B.C. government fast-tracked FortisBC’s Tillbury LNG facility’s expansion by exempting them from a certificate of public convenience.

“The government wanted to get out of the way and allow the transportation fuel component of the LNG industry to develop quickly,” said Bill Bennett, minister of energy and mines and minister responsible for core review.

Currently, FortisBC Energy Inc.— a regulated utility that providing energy such as natural gas and propane —  employs almost 1,800 British Columbians and serves approximately 945,000 customers in 125 B.C. communities.  The expansion is expected to provide 300 person-years of construction jobs and about $4 million a year in taxes paid to various levels of government over time.

It’s also expected to include a second tank and a new liquefier, both to be in service by mid-2016 and will add almost one million gigajoules of LNG storage, as well as 30,000 to 60,000 gigajoules of liquefaction capacity per day.

“This $400-million investment in FortisBC’s Tilbury LNG Facility will build B.C.’s marketplace for the world’s cleanest fuel, LNG, and create over 300 person-years of employment in the Lower Mainland,” Bennett said.

As part of government’s direction, the BC Utilities Commission (BCUC) will set the LNG dispensing rate at $4.35 per gigajoule — a unit of measurement for energy usually used for natural gas, where one gigajoule is equivalent to 27.7 litres of diesel. The set rate will help the transportation sector to adopt LNG as a fuel source and allow Northern and remote communities to switch to LNG.

“Today’s direction from the government allows FortisBC to better support the province in the development of natural gas for the transportation sector. 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.” said John Walker, president and CEO of FortisBC.

In addition to the exemption from the certificate of public convenience, the provincial government also exempted FortisBC from a necessary review by the BCUC and announced updates to the greenhouse gas reduction regulation. 

Key changes to the greenhouse gas reduction regulation include:

• an increase to the allowed capital per station for building LNG or compressed natural gas (CNG) fuelling stations that will meet the needs of customers with larger fleets;
• an increase in the incentive funding for safety training and upgrades to LNG or CNG vehicle maintenance facilities;
• the expansion of incentives to rail and mining vehicles.

FortisBC expects that its gas utility customers will benefit from the additional volumes moving through the pipeline system to serve the expanded LNG facility.

But the $400-million investment in FortisBC’s gas utility is still subject to FortisBC Board approval and other regulatory and environmental permits and approvals, including the B.C. Oil and Gas Commission. 

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