Recent weeks have seen further progress in Canada’s race to become an LNG producer. Yet another application for an export licence has been filed with the National Energy Board (NEB), while the US Department of Energy (DoE) has approved an export licence for Oregon LNG, which, although located in the US, would export mainly Canadian gas.
Quicksilver Resources announced on the 28th July that its wholly-owned subsidiary Quicksilver Resources Canada Inc. (QRCI) had filed an application with the NEB to export up to 20 mtpa of LNG from its Discovery LNG site located near Campbell River in British Columbia. If approved, the licence would permit QRCI to export LNG for a period of 25 years starting in 2021.
The new filing takes the number of proposed LNG projects in Canada to 21 (five of which are from a single company, Steelhead LNG), of which 11 have already been granted export licences. To date the NEB has not turned down anyof the applications.
QRCI claims several advantages for the brown-field site it has located near the Campbell River.
Brown-field site: Quicksilver says it chose Campbell River as a location for its proposed project because of its “economic, environmental and logistical advantages”. The project would be located on an existing industrial site which was last used for a pulp and paper processing facility that closed in 2009. The physical footprint of Discovery LNG would be much smaller than that of the mill. Other advantages include a deep-water port, pipeline gas supply and existing infrastructure, such as roads, electricity supply and access to water.
Like most other would-be Canadian LNG producers, the company is targeting Asian markets in the Pacific Rim. Gas supply for the plant would come mostly from fields in the Western Canadian Sedimentary Basin (WCSB), though the company has not ruled out taking gas from other fields in Canada or the United States.
The company is proposing to construct four liquefaction trains, storage tanks and a berth to accommodate LNG carriers. First exports could begin as early as 2021however the project would not reach its full capacity of 20 mtpa until around 2024. With the project currently the subject of a feasibility study, QRCI has already begun talks with potential gas suppliers and LNG customers.
QRCI has been exploring the potential of Canadian coal-bed methane since 1999 and is currently developing unconventional gas resources in the WCSB. It claims to have estimated gas in-place volumes of 37.5 Tcf in the Horn River Basin of north-east British Columbia and another 200 Bcf of proved reserves in Alberta. Given this resource base the company expects to use primarily its own gas for the Discovery LNG project.
Oregon gets DoE green light: In other news, Oregon LNG announced on the 31st July that it had received a conditional licence to export LNG to non-Free Trade Agreement countries from the US DoE.
The project, already well advanced in the environmental approval process conducted by the Federal Energy Regulatory Commission (FERC), is expected to cost around $6.3 billion. It is one of only two located on the western coast of the US and would source most of its gas supply from Canada. The project already has approval from Canada’s NEB.
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