New LNG

facility roposed for Southern British ColumbiaJune 19, 1997 Westcoast Energy Inc. has proposed a step-by-step approach to meeting additional natural gas demand in southern British Columbia that includes construction of a LNG facility and enhancements to existing pipelines in the region.
Art Willms, President and Chief Operating Officer of Westcoast said Southern British Columbia needs more capacity to meet peak natural gas demand during cold winter weather - typically ten days or so a year. Willms noted that additional growth in demand would be influenced by future economic and population growth as well as factors such as conservation and renewables. "We know there is a need to meet peak demand. We know some additional capacity is likely necessary to maintain reliable service. We also know there are uncertainties around how much additional demand might be generated," Willms said.
BC Gas, the utility that distributes natural gas to homes and businesses in southern British Columbia earlier announced its intention to build a major transportation pipeline across the southern interior of the province, tapping into Alberta gas reserves as opposed to traditional British Columbia sources. The proposal would commit BC Gas customers to the new pipeline facility for thirty years.
"The BC Gas proposal for a new Southern Crossing pipeline will cost in the order of a half billion dollars," Willms said. "This is a large capital expenditure indeed and, in the face of an uncertain outlook, a risky one as well." The Westcoast Energy LNG plant would cost about $120 million. Additional pipeline enhancements would only be undertaken on an as-needed basis.
Currently BC Gas purchases most of its natural gas from producers in north-eastern British Columbia and then transports it through existing pipelines to southern markets at a cost of about 32 cents per thousand cubic feet. The new pipeline system being proposed would triple these transportation charges to about $ 1.00 per thousand cubic feet, Willms said. Moreover, the proposal would necessitate committing the lower mainland market to BC Gas for the next three decades in order to amortise the costs of the new pipelinefacility.