Liquefied natural gas project aims for 2009 start-up
$800-million cost. Public hearings start in fall for terminal
ROBERT GIBBENS
The Gazette, Thursday, June 09, 2005
Quebec's $800-million Rabaska project to import liquefied natural gas from the Mideast to a St. Lawrence River terminal at Levis is striving toward a 2009 start-up, just a year after New Brunswick's Canaport terminal comes on stream.
Rabaska and Canaport are the most advanced of several LNG terminals proposed in Canada, including two in Quebec, two in Nova Scotia and two in British Columbia. Canada's domestic gas supply is tightening fast because of surging U.S. demand and imports are needed.
Last month, Rabaska Inc., owned one-third each by Gaz Metro Inc., Quebec's natural- gas distributor, Enbridge Inc., the Ontario pipeline giant, and Europe's Gaz de France utility, overwhelmingly won support from Levis for the Rabaska terminal. Levis is opposite Quebec City.
But while Irving Oil's Canaport terminal at Saint John and one of the Nova Scotia projects have won environmental clearances, Rabaska faces a 15-month-long evaluation process, including a marathon of public hearings, before it gets to that point.
Rabaska has a 20-strong team that is completing environmental impact statements for provincial and federal regulators in the next few weeks, said president Glenn Kelly, including filings with the National Energy Board.
About 40 engineers at consultants M.W. Kellogg in London, England, are completing engineering work for the terminal.
Kellogg has designed many of the world's 50-odd LNG terminals.The regulators begin hearings in Levis in the fall, Kelly added, and the evaluation process could lead to regulatory authorization by the end of 2006, with a 2009 target for start-up. About $35 million will have been spent in the pre-construction period.
Ontario and Quebec use Alberta gas for home heating, power generation and industrial output. Rabaska would provide 500 million cubic feet daily, helping offset declining Western Canada reserves. That's half the volume of Canaport, which will supply Atlantic Canada and Boston.
"North America has five per cent of world gas reserves, but makes up 30 per cent of world demand," Kelly said.
"The global reserve life is 75 years against North America's 10 years. Gas prices have doubled in five years and eastern Canada urgently needs a competitive alternative supply."
Rabaska chose the site in Levis's industrial park because the nearby shipping channel running south of the Ile d'Orleans offers the safest navigation conditions, especially in winter, Kelly said. At that point, the St. Lawrence is two kilometres wide. Oil tankers and container ships have been sailing this channel year-round for many years.
Gaz de France, a pioneer of the 40-year-old international LNG industry, is responsible for the gas supply to be sourced in the Mideast, Algeria or elsewhere, and for providing tanker transport. The double-hull tankers will be designed specifically for the rugged St. Lawrence winters.
Rabaska's twin gas reservoirs will be half-underground and almost invisible from outside. They also will be "double-hull," with the inside shell made of high-strength nickel steel and the outside of one-metre-thick concrete.
When the LNG tankers arrive at the offshore unloading dock, the super-cold (minus 160C) liquid gas will be pumped into the reservoirs for storage. LNG has one/600th of the volume of unfrozen gas, making tanker transport possible.
"You pipe the LNG through a shower of hot water to reduce the temperature and convert it to gas that can move through a 45-kilometre pipeline to join the main TransCanada system near the Quebec Bridge," Kelly said. "Rabaska won't liquefy gas as the Gaz Metro storage plant does in east Montreal."
The LNG industry claims 99 per cent safety in liquefaction, storage and regasification. No major incidents have occurred in 40,000 sea voyages covering 160 million kilometres, it says.
U.S. critics earlier raised the potential threat of terrorist attacks on the LNG tankers as they enter harbours such as Boston or on the terminals themselves, but none has occurred. Half the world's LNG terminals are in Japan, the biggest importer, where criticism has been mild.
But many LNG terminals planned for the U.S east and west coasts are delayed by complex permitting processes and strong local opposition.
The industry says pipe fractures in tankers or terminals could cause minor spills, but the risk of explosion is minimal since the gas would need an ignition source.
Rabaska can count on strong opposition at the public hearings, said Daniel Green, head of La Societe pour vaincre la pollution, and serious security and environmental issues remain.
"Canaport's imported gas may replace higher-risk nuclear energy, but Rabaska won't offer that advantage for Ontario or Quebec. The Ile d'Orleans shipping channel may see only 60 more vessel movements annually, but the risk of collision or spill is high."
Canaport will seek actual construction contracts next month. Spain's Repsol YPF will handle the LNG supply and tanker transport. Quebec's second terminal is planned by Petro-Canada and TransCanada Corp. at Gros Cacouna on the lower St. Lawrence River. They have not disclosed the gas supply partner.
rgibbens@thegazette.canwest.com