Page 4 - NorthAmOil Week 28

NorthAmOil COMMENTARY NorthAmOil
Go west, go green
Kitimat LNG intends to use hydropower to drive its liquefaction process, writes Ed Reed
WESTERN CANADA
WHAT:
Chevron has submitted a new application for Kitimat LNG that tweaks various elements, including the use of hydropower.
WHY:
BC projects face regulatory challenges over environmental impacts.
WHAT NEXT:
Kitimat LNG will not be coming along in the near future but Wood bre LNG is also planning on hydropower generation.
Chevron and Woodside Energy are retooling their proposed British Columbia LNG plant to be cleaner and more ef cient.
NO part of the energy industry is immune from environmental pressure, including the LNG sector. And British Columbia is making some of the most signi cant progress in greening this process.
Chevron and Woodside Energy are retool- ing their proposed British Columbia LNG plant to be cleaner and more e cient, similar to the Royal Dutch Shell-led LNG Canada project, which has also made much of its green creden- tials. Furthermore, the Wood bre LNG plan – which is aiming to start construction later this year – will also be powered by clean energy.
E-drive
Kitimat LNG is a 50:50 joint venture made up of Chevron Canada and Woodside Energy Inter- national (Canada). e plan is for the plant to be all-electric – running on “clean renewable hydroelectricity”, according to a letter from Chevron to the BC Environmental Assessment O ce (EAO), dated July 8. e partners rst began talking about the E-drive plan with the Haisla Nation in October 2017. A schedule and cost estimates have not been provided.
e letter said the proposed Compact E-drive Design would involve an advanced compact module design, with less storage required and driven by hydropower, provided by BC Hydro. It also involved an optimised design of the marine terminal. Power would be bought from the utility, with limited diesel generators on site for backup needs. Electricity would be provided via a 17-km high-voltage transmission line, running from the Minette substation to Bish Cove.
e plan for lique ed exports was put for- ward in 2010, when it called for the construction of two trains with 5mn tonnes per year (tpy) of capacity each. e partners expanded the pro- posal in April, increasing the size of the trains to 6mn tpy each. ere is also the potential for a third train to be built on the site, which would take total production to 18mn tpy.
Under the original plan, Kitimat LNG was to have two storage tanks, each with 210,000 cubic metres of capacity. e changed plan involved only tank – with a second coming with the addition of a third train – but the tank would be larger, at 260,000 cubic metres.
In addition to a second tank, with 130,000 cubic metres of capacity, a third train would also involve a second loading berth. In order to expand to a third train, the Kitimat LNG part- ners have been advised that it would require new federal screening, on the basis that this increase
is more than 50% above the originally permitted capacity. While the volumes under discussion are larger, Chevron noted the proposed design would permit an “increase in capacity without the corresponding signi cant increase in emis- sions of a “traditional” LNG facility”.
Using the E-drive will reduce unit costs, execution risk and improve use of the site – in addition to cutting emissions, the Chevron sub- mission said. Where traditional plants require 7-18 hectares per million tpy of capacity, the E-drive plan requires only 5 hectares.
Top pressure
The New Democratic Party (NDP) came to power following an inconclusive election in 2017, in a temporary alliance with the BC Green Party. e Liberal party won more seats, at 43 to the NDP’s 41, but three seats going to the Greens tipped the balance of power.
The NDP has made efforts to support the LNG industry, bringing forward legislation in March to provide it with tax credits and remove taxes brought in by the Liberals in the previous parliament. The Greens symbolically walked out of the assembly when voting came in April for the NDP proposal, leaving votes deadlocked with the Liberals opposed. e deputy speaker ultimately cast his vote with the opposition, knocking back the tax credit plan.
BC is in the process of expanding its hydro- power capacity, with work moving ahead on the Site C plant. is is due to start producing elec- tricity in 2024.
It is not just the politics of BC that pose chal- lenges for the LNG industry. Not all local groups support such plans, with complaints ranging from worries about the impact on the area to the more global menace of carbon emissions.
Woodfibre LNG, for instance, changed its plans from a oating to an onshore design in response to concerns on the marine environ- ment. The project expects its decision to use electricity from clean sources instead of burning of natural gas to reduce greenhouse gas (GHG) emissions by as much as 80%, raising the possi- ble claim that the production will be the cleanest LNG in the world.
Chevron’s Kitimat LNG plan is a step ahead of the competition. Shell’s LNG Canada project is only partially hydro driven, while Wood bre LNG is substantially smaller. ere are no guar- antees that Kitimat LNG will move forward and it is likely that this technology will increase con- struction and running costs.™
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w w w . N E W S B A S E . c o m Week 28 18•July•2019