LNG plant could come online by the end of year

While west coast export projects remain in limbo, a liquified natural gas plant could be up and running in Dawson Creek by the end of the year.

An AltaGas Ltd. official told Alaska Highway News on Friday that the company aimed to begin operations at its Dawson Creek LNG plant by no later than the end of the year.

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The plant would be the hub of a $250-million network of LNG processing facilities spread across northern British Columbia.

The AltaGas plant would produce around 20,000 gallons of chilled natural gas a day, most of it aimed at oil patch customers. The facility will consist of modules on skids that will be installed in an industrial area north of Highway 97.

While the Dawson Creek facility is not B.C.'s first LNG plant, it would be the first to come online on Premier Christy Clark's watch. Clark visited Dawson Creek last summer to sign a final investment decision with the company. 

Unlike the roughly 20 facilities proposed for B.C.'s west coast, the AltaGas project in Dawson Creek is aimed at domestic customers, chief among them the oil and gas industry. Even if it ramps up to its potential 500,000 gallons, it would still be much smaller than the export projects.

AltaGas Chief Financial Officer Deborah Stein told the Alaska Highway News the company sees regional LNG as a pilot project. As such, the company decided to try to move forward without a firm list of customers.

"Because it was a pilot project we were prepared to take that financial risk," Stein said.

"It was relatively small. We made the decision to move forward with the pilot and go out and provide the service to the community without major long-term contracts underpinning the investment opportunity."  

LNG produces fewer greenhouse gas emissions than diesel, which many drilling companies use to power their oil patch operations, Stein said. However, the oil price downturn has made dirtier alternatives even cheaper, while gas drilling in the Peace was down around 30 per cent in July over last year. That's made it more difficult to find customers. 

"The ability for LNG on a price basis to be competitive with things like propane and diesel has become a little bit more challenging," Stein said.

"We may have lost some ground on pure economics...but, if you look at the upside for the environment, there is a significant incentive for end users."

She added that if the Dawson Creek project is a success, similar facilities could be built in Alberta to provide gas for oil sands upgrading.

At its peak, the northern LNG network would include facilities in Fort Nelson, Port Edward and Terrace, connected by rail and the PNG pipeline. The Dawson Creek facility is the only part of the network currently under construction.

The company did not have firm job numbers for the projects available as of Friday.                                                        

reporter@dcdn.ca

© Copyright Alaska Highway News

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