Special Features - N2K - June 2014

JUNE 2014 • VOL. 1 ISSUE 3

Getting Modern RIO TINTO ALCAN’S GABY POIRIER WANTS TO BE THE BEST

Ground Breaking CONSTRUCTION BEGINS FOR MAJOR WORK LODGE IN KITIMAT

Cutting Edge EXPERIMENTAL OIL LEAK DETECTION SYSTEM TAKES NEXT STEP

That’s the Spirit FIRST NATIONS PIPELINE PLAN GAINING MOMENTUM

Going Green VANDERHOOF LUMBER MILL CREATES OWN ENERGY

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Volume 1 • Issue 3

June 2014

IN THIS ISSUE

GOING MODERN Rio Tinto’s Gaby Poirier

6

UNWASTED ENERGY Vanderhoof mill makes power 16

BIG INVESTMENT CN commits $2.1 billion to upgrade 11

GROUND BREAKING PTI begins construction 12

EAGLE SPIRIT First Nations pipeline plan

CUTTING EDGE New leak detection technology 18

UHF LIFELINE Terrace firm builds radio link 20

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Northwest’s Largest Volume Dealer for a Reason!!

Rising to the Rio Tinto Alcan’s Gaby Poirier has only one goal in mind ... be the best

By Shaun Thomas

G

aby Poirier may be a newcomer to the Northwest, but Rio Tinto Alcan’s (RTA) new manager for B.C. operations certainly has lofty goals for the smelter in Kitimat.

“We want to become the best aluminum smelter in the world,” said the man who moved to Kitimat from Alma, Quebec last June.

BECOMING MODERN Being at the top of the pile when it comes to producing aluminum may not have been seen as attainable even five years ago, but all of that changed in December 2011 when RTA announced approval of approximately $3 billion to modernize its Kitimat facility.

6

Anyone monitoring the progress of the modernization can appreciate the magnitude of the project but, taken at its basest form, the project entails switching from the dated Vertical Stud Soderberg technology to RTA’s AP40 smelting technology.

“It’s a technology change that will make a world of difference ... the current plant is sixty years old, but that technology is probably 80 to 90 years old,” explained Poirier.

“It’s like switching from the T-model of Ford to the Ford F150, to give you an idea.”

The new technology will allow the Kitimat smelter to produce 48 per cent more aluminum than the existing operations all while reducing total emissions by 50 per cent, improving safety on the site and improving overall efficiency.

SEE PAGE 7

N2K PROFILE • RTA’s GABY POIRIER

“This is a once-in-a-lifetime opportunity.

To me, I’m privileged to be here.”

- Gaby Poirier That type of change, said Poirier, is just one of several things that can put Kitimat head-andshoulders above its global competition.

“If we look at all of the smelters that have been built in the last 10 years, there are four things we have that will be key factors to becoming the best,” he said.

“We have Kemano hydro power. With the 50 per cent reduction in emissions with the new technology, we are going to produce some of the greenest aluminum on earth. We have a deep-sea wharf with an open connection to the Asian markets, which are emerging markets. And we have skilled operators that include first, second, third and fourth generations working on the site and I am always saying they have aluminum running through their veins.”

Once the new smelter is complete, Poirier will do something that very few before have had the chance to do.

“It is a unique situation and a unique experience to be able to close an old facility and start a new one in the same year. This is a once in a lifetime opportunity,” he said.

“To me, I am privileged to be here.”

PREPARING FOR THE FUTURE Any change in technology requires a period of transition, moving from the old to the new. While the first aluminum isn’t expected to be poured until the first half of 2015, Poirier said work on that transition is already well underway.

SEE PAGE 8

7

N2K PROFILE • RTA’s GABY POIRIER

“We are putting about $3million into the economy every day through the Kitimat Modernization Plan.”

“We have already started the commissioning in many areas, like the paste plant and casting. So the commissioning has started, but it is going to take place in all of the sectors around the smelter. The potlines will be commissioned and in fact for the first hot metal, the potlines are the last thing that we start,” he explained.

For some staff, the modernization has already taken them away from their regular duties at the smelter to be part of what Poirier called the pilot team.

“What we are doing now, and we started last fall, is we are pulling people out of the old operation, such as trades, supervisors and operators, and they become the pilot team. Their responsibility is to prepare for the new equipment, so they have to write all the safety procedures, operational instructions and the process itself. They are the ones that will be training the other employees. Our employees will train the future employees. We are going to develop, within the facility, experts,” he explained, noting the idea is one that is both practical and necessary.

“If we had three or four smelters in the region, you have a lot of capacity to train and exchange best practices. Because of our location, we are the only smelter in northern B.C., if we don’t create that expertise we will still be training people in five or six years.”

AN ECONOMIC ENGINE While the benefits of a modernized smelter have yet to be seen, the economic benefits of the modernization itself are impossible to dispute. Figures from RTA estimate that, as of March 26, 2014 $597 million has been

8

spent in businesses between Kitimat and Prince George in contractor/supplier agreements and subcontracting opportunities.

“We are putting about $3 million into the economy every day through the Kitimat Modernization Plan,” said Poirier.

“At the beginning it was more engineering and buying equipment, but right now it is mainly labour because we have the equipment and we just have to install it.”

There are currently more than 1,000 workers split between the camp at the far end of the smelter site, the recently opened Delta Spirit Lodge and in hotels and apartments throughout town. Since the modernization began Kitimat has seen its vacancy rate drop significantly and now sits at almost zero for apartments and home rentals.

When the new smelter begins operations, however, the number of permanent employees will drop from the current 1,200 to approximately 1,000, with most of that coming from natural attrition.

While the economic impact of the modernization may be winding down, Poirier said there is no doubt that RTA will continue to be a major presence in the Northwest.

“First Nations, the community and the smelter have always been together for the past 60 years and it has to stay like that,” he said.

“This is something that is very close to my heart.”

SEE PAGE 9

N2K PROFILE • RTA’s GABY POIRIER

“Sixty years ago we had the pioneers that built the plant and why we are still here is because of them.

I told them that in 60 years, I want that generation to say the same thing about all of us.”

SMELTER SAVIOUR Poirier pulls no punches when it comes to the importance of RTA approving the modernization for the Kitimat smelter.

“This project was a critical one. We have been here 60 years and the community, First Nations and Rio Tinto Alcan always work very well together. It would be a shame if we had to stop the operation because our old smelter would not be able to compete in the market,” he said.

Aside from keeping the smelter operating for the present, Poirier said the modernization will go a long way to ensuring the smelter remains a part of the Northwest for the next 60 years and beyond.

“We want to become the lowest cost-per-tonne producer. This is the main thing to ensure we are here for another 60 years because we don’t control the

price of metal. We have no control over that. So when you are Rio Tinto Alcan, what do you do with your lowest cost-per-tonne producer? Are you thinking about shutting it down or keeping and investing in it?

The last time our CEO was here, Madame (Jacynthe) Cote, she sat right across from me and I told her we are going become the lowest cost-per-tonne producer, we will be a safe facility and we will provide an easy business case decision — you will just have to say yes,” he said.

“I want to see the fifth, the sixth, the seventh, the eighth generation working here. That’s why I said to all of the employees, 60 years ago we had the pioneers that built the plant and why we are still here is because of them. I told them that in 60 years, I want that generation to say the same thing about all of us.”

SEE PAGE 10

9

N2K PROFILE • RTA’s GABY POIRIER

“The only way to achieve this is by working together as one team with one goal.”

BECOMING THE BEST Despite all of the advantages, Poirier doesn’t expect it to be easy to become the best. And like any good leader, he holds no illusions of success without a lot of time and teamwork.

“I want to make sure we have a successful commissioning and startup of the plant and, to me, it is like dragonboating ... when you want to win the race in dragonboating, the two most important things are teamwork and a great start. If you don’t work as a team and you don’t have a great start, I am sorry but you will always be in catchup mode,” he said.

“The only way to achieve this is by working together as one team with one goal. That is how we will become the best as fast as possible.”

There can only truly be one “best in the world” and Gaby Poirier and the team at Rio Tinto Alcan’s Kitimat smelter are making a strong case that the aluminum industry crown belongs on the North Coast.

A proposed liquefied natural gas facility located on Lelu Island within the District of Port Edward. Pacific NorthWest LNG would generate significant benefits for northwest British Columbia and the rest of the province.

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Canadian Energy. Global Reach.

1,000,000 carloads by 2015 CN earmarks $2.1 billion for safety, upgrades Northwest B.C. projects on the agenda

By Ryan Jensen

C

N Rail is making major investments in northern B.C. to keep pace with industrial development in the region.

In 2011, more than 500,000 carloads moved along the rail company’s B.C. North corridor. By 2015, CN predicts that number will double to one million.

To prepare, in 2012 CN announced a multi-year capital program to expand freight train capacity to handle the growing volumes in the Edmonton-Prince Rupert corridor. In the last 10 years, CN has invested more than $150 million on improvements in the route.

Since 2004, CN has constructed 21 sidings to handle 12,000-foot trains travelling between the two communities as well as new signalling, tunnel and bridge clearances and yard expansions in Smithers and Terrace.

This year, in an effort to improve safety and efficiency and improve service, CN is spending $2.1 billion.

“CN is committed to making continued improvements in its safety performance—infrastructure investments are critical to this, as well as to driving improvements in customer service and taking advantage of freight opportunities to grow the business at low incremental cost,” said CN president and chief executive officer Claude Mongeau.

“Investments in our network and distribution capability, the acquisition of new locomotives and equipment and the enhancement of information systems and technology will help support our agenda of operational and service excellence. They will help us achieve our goal of becoming a true supply chain enabler and help our customers compete better in their markets.

They will also position us to take advantage of business opportunities in intermodal, energy and other resource and manufacturing markets.”

Of that $2.1 billion total, $1.2 billion is going toward track infrastructure, including rail and tie replacement and bridge upgrades. Specific projects in northern B.C. will be announced soon, said Warren Chandler CN senior manager public and government affairs.

“CN has increased our capacity through our investments in sidings and extended sidings along our line to Prince Rupert,” Chandler said in an email.

Distribution centres and transloading terminals will also receive approximately $600 million in upgrades.

Approximately $300 million will be spent on capital expenditures to improve the rail company’s aging fleet.

This year, CN is purchasing 45 new high-horsepower locomotives.

Currently between 20-25 trains runs through the Prince George to Prince Rupert corridor daily, with the top-three commodities being intermodal, grain and coal.

11

Ground Breaking Day for Northwest B.C.

By Shaun Thomas s the sun beat down on Strawberry Meadows, PTI Group president and CEO Ron Green prepared to make company history.

A

“This is a first for us. We’re in the community,” he told those gathered for the Kitimat Lodge groundbreaking ceremony on May 1.

“We generally build our facilities 100 miles from nowhere, where industry is. We’re not close to communities and we have to be totally self-contained. Here we get to participate with the community.

We’re intimate with the proximity we have and can help drive some economic value.”

Indeed, building a lodge in the residentially-oriented Strawberry Meadows subdivision is a far cry from the company’s previous work in Kabul, Afghanistan, the mountains of Kyrgyzstan or the remote woods of northern Alberta. But the PTI Group recognizes that and is adjusting operations to meet the unique urban environment.

“Normally we put in our own convenience store and other facilities on site. We’re not doing that here. If they want stuff, they are going to have to go into town, so the merchants are going to be able to benefit from that approach to business,” he said, noting aesthetics and landscaping were another new consideration.

“This will be a different kind of environment. Normally we’re way out in the bushes and nobody sees us. Here we’re part of the community and we’re excited about creating something that, when people drive by they say ‘oh, look at that’. It will look good ... we’re going to be proud of it and I think people will be proud of it too once we get going.”

See Page 14

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PTI breaks ground These are good, hardworking tradespeople that want to make a living and provide for their families ... they’re good people.”

Some in the community have expressed concerns about the social issues that are perceived to accompany an influx of workers, but Green said the notion of a rowdy “work camp” are far from the truth.

“We’re going to control the environment. We’re going to have a good, healthy, safe place to live and go to work ... we don’t believe there is anything to be concerned about. In our experience, because we so tightly control our environment, there is not a problem. Our rules and requirements are so stringent that if someone breaks those rules, they can’t stay in our facility. Generally if they can’t stay in our facility, they are out of work because it is not just this facility, it is every one of the PTI lodges that they cannot stay in. We don’t have the challenges other sites have,” he said.

“I had a bit of a conversation earlier today with someone about ‘all these degenerates’ that are going to be coming to town and ‘get drunk and do drugs’.

That’s not the case. These are good, hardworking tradespeople that want to make a living and provide for their families ... they’re good people. We like those people. They are our residents, they are our clients and they’re great folks.”

Construction of the Kitimat Lodge is expected to provide 150 jobs with another 100 to 150 jobs needed during operation. While PTI plans to hire locally as much as possible, the timeline for the buildout of the lodge remains to be seen.

“We have to get our temporary camp in so we can put in our workforce, and then we are relying on client commitments for this site so that we can move forward,” said Green, adding there is expected to be 400 rooms ready in February.

“We try to be there first so clients can make decisions about their project, not about where people live, so they can focus on doing their project more quickly and efficiently. That’s our stock and trade, being here when they need us.”

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First Nations oil

By Martina Perry

E

agle Spirit Energy believes its approach to an oil pipeline project will get the support of First Nations in northern B.C.

out to First Nations in Alberta,” said Helin.

The pipeline would transport synthetic crude, which is an amber coloured product and one of the lighter forms of crude oil, as opposed to bitumen. Helin said there are three shipping points the partners are looking at, but cannot “This is going to be a First-Nationssay where because of non-disclosure led initiative. Without them, it’s not agreements. going to happen. It’s an opportunity for Eagle Spirit Energy said the project First Nations to develop some economic would present investment, business opportunities and definitely a lot of and contracting opportunities, training employment opportunities,” said Calvin and employment, and resource revenue Helin, president and chairman of Eagle sharing opportunities in communities Spirit Energy. along the pipeline route, as well as the Pending First Nations approval, refinery and shipping terminal. the Aquilini Group has committed to Calvin Helin “We’ve invested a huge amount of underwrite the approximately $18 billion time and effort into creating a world class cost of a state-of-the-art pipeline connected model,” said Helin, pointing to the hiring of Dan Hisey, a to a refinery in northern Alberta or northeastern B.C. former chief operating officer of Alyeska Pipeline, as the Helin said the refinery would be built by Eagle Spirit senior technical advisor for the project.

Energy, the Aquilini Group and partnering First Nations.

“What we have the opportunity to do in northern There are three options being considered for the B.C. is to create the highest standard in the world where pipeline’s route, with one option actively being pursued.

First Nations people and local people have a chance to “We’ve gained quite a lot of support among First have input on how it’s created and have a say in how it Nations in B.C. along the route from thecoast out to happens.”

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Goes Green Vanderhoof

lumber mill

By Cameron Ginn

T

he L&M lumber mill has gone green following the installation of machinery to convert waste heat into energy and additional revenue.

Called an Organic Rankine Cycle (ORC) turbogenerator, the unit is the first-of-its-kind in Canada to be powered off waste heat at a sawmill, said Alan Fitzpatrick, general manager and director of L&M Lumber, Nechako Lumber and Premium Pellet Ltd.

Installation of the unit is part of a perpetual shift towards developing a more energy-efficient mill, explained Fitzpatrick, who implemented and installed the turbogenerator under a newly-formed company, Nechako Green Energy Ltd. Powered by waste heat emitted from the mill’s current thermal energy system, which burns bark to dry lumber in a kiln, the ORC turbogenerator can produce up to 20 megawatts of electricity, enough energy to power about 1,500 homes or the entirety of Vanderhoof.

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“We have taken cheap power for granted in this province.�

Prior to installing the unit, excess heat was being lost, venting into the atmosphere, explained Fitzpatrick. By harnessing it with the ORC unit, L&M Lumber expects to produce about 30 per cent of the energy currently being consumed by the mill and save up to $1 million annually. “The basic purpose was to become more efficient and energy self sufficient, reduce our footprint and create a revenue stream from a waste item,� Fitzpatrick said.

Sustainable operations and reducing waste have long been top priorities for L&M Lumber, a Vanderhoofbased company that produces high-quality lumber for markets in Canada, the U.S., Japan, South Korea, the U.K. and the Netherlands.

Fitzpatrick said the mill utilizes all materials on site, turning logs and byproduct into either lumber, wood chips, wood pellets, heat and, now, electricity. “There is virtually no waste of fibre on our site. We have the most up-to-date and advanced scanning and optimizing equipment for lumber production in the world,� he said.

More than six years have passed since Fitzpatrick began investigating solutions for harnessing waste heat to when he started the ORC turbogenerator for the first time last year.

During the same time period, Fitzpatrick negotiated a load displacement contract with B.C. Hydro to sell excess energy generated by the ORC unit, further reducing the mill’s electricity rates. “In my opinion we have taken cheap power for granted in this province,� said Fitzpatrick. “Energy is becoming more expensive and harder to get, so self generation from a waste stream makes a lot of sense environmentally and economically.�

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Cutting Edge Promising experimental leak detection testing system designed for pipelines

By Cameron Orr

T

he External Leak Detection Experimental Research (ELDER) apparatus, a joint venture between Enbridge and TransCanada, is on the very cutting edge of oil leak detection.

The apparatus is an unassuming structure, looking more like a metal dumpster in aesthetic design than a top-of-the-line technology, but it’s what happens under the hood that really counts.

The ELDER device began life as the Large Scale Test Apparatus (LSTA) before becoming ELDER in 2012.

The idea behind the device is to look closely at cable-based spill detection technologies. It’s a 24’ by 8’ structure, with a 24-inch pipe running through its centre.

For comparison, the proposed pipe to bring bitumen from Alberta to Kitimat on the Northern Gateway project would be a 36-inch pipe.

Right now a group of engineers, led by Enbridge’s senior manager of leak detection Ray Philipenko, are taking a close look at various fibreoptic cable-based leak detection technologies.

“One of the primary things about conducting the tests is doing it safely and making sure people aren’t being exposed to any kind of dangerous environment,” said Philipenko.

“The container helps us do that. We can fill the

container up with different types of soil and that’s going to allow us to understand how leaks migrate in different kinds of soil environments ... it will also allow us to understand different hydrocarbon products and their characteristics and how they migrate toward these cable systems.”

The “cable systems” being looked at cover technologies such as heat detection or even audio cues that pipeline make during a spill. In that instance, pipelines all have an auditory signature, said Philipenko, and a cable could pick up when that changes.

The temperature cable would clearly use heat signals to detect leaks.

“When you have the cable, it’s laid in the ground at a certain temperature. Most times of the year the hydrocarbon, whatever products you’re flowing in a pipeline, is likely at a different temperature. So if there’s an unexpected release the fluid would eventually migrate, touch the cable and change the characteristic of the actual fibre. And that, by virtue of a difference in temperature ... would of course affect the light and would create a leak signature,” he said, adding such a system is called Distributed Temperature Sensing.

The objective, he notes, isn’t to create a magic bullet system that will work for all pipelines.

SEE PAGE 19

18

“They’re fit-for-purpose design ...”

“Each one of the technologies will likely be differently deployed in a different way. They’re fit-for-purpose design, which we’re going to have to take into account. It’s likely not going to be a one-size-fits-all silver bullet technology that’s going to win in the end. What the testing is going to tell us is performance under different conditions and then allow us to make good decisions about how to deploy it,” he said.

Philipenko said Enbridge didn’t design ELDER with the idea to partner with industry, but the company nonetheless has teamed up with TransCanada with a Joint Industry Partnership regarding ELDER. That agreement was signed in to place in October 2013 and includes joint-funding for the project.

In northwestern B.C. TransCanada may be more familiar as a natural gas pipeline proponent,

including their plan to build Coastal GasLink, a pipeline to feed the LNG Canada liquefaction facility. But TransCanada may look to applying findings from ELDER to oil pipeline proposals of their own, the highest profile of which is the Keystone XL which would be built into the United States.

Enbridge, meanwhile, has already applied technologies from ELDER to active pipelines. Philipenko didn’t name which, but he said an 18 mile

stretch of an Enbridge pipeline in the United States has a cable laid down with it as part of a pilot project.

The benefit of placing cables in real environments will also show any potential construction challenges to the technologies, as he said most construction contracts haven’t typically laid cable along pipelines.

There is the ultimate goal that technologies refined in ELDER will be put to work on their proposed Northern Gateway project.

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Building the UHF Lifeline

By Rod Link

A

Terrace communications company is already reaping the benefits of the proposed LNG pipelines through northwest B.C.

Rob Dykman’s Coast Mountain Wireless secured its largest-ever contract to build radio communication shelters along the planned natural gas pipeline route into Kitimat.

Already two of the 10 shelters designed by Coast Mountain are in position and a third is nearly ready to go, with the others will follow as the installation project moves along. The network will provide two UHF radio communications channels – one for the supervisors and managers along the project length and the other for first aid. “Health and safety is a huge factor nowadays,� said Dykman of the latter communications channel.

The exact locations depend upon the geography, with ones in mountainous areas closer together to ensure service. Each of the shelters weighs 5,000 pounds, meaning a heavy-lift helicopter is needed to put them in place.

See Page 21

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“At $10,000 per hour, you don’t want to waste any time.”

“We used the same helicopter brought in last year for the [Northwest] Transmission Line towers,” said Dykman.

“At $10,000 per hour, you don’t want to waste any time.”

The aluminum shelters were made by a Lower Mainland firm, with Dykman’s firm handling the design and installation of the equipment inside.

Solar panels on the roof and one attached to each side of the south-facing wall provide power to deep-cycle batteries.

“We have two banks of batteries so if there’s trouble with one, we have a redundancy,” explained Dykman.

The battery capability is such that three months worth of service is possible if, for some reason, the solar panels can’t generate power.

Two-inch custom rods embedded into rock with the help of a drill will anchor each shelter’s four corners.

“With the kind of weather you can get on a mountain top, you want to be stable,” said Dykman.

A separate communications link will connect each shelter with the Coast Mountains office in Terrace so performance can be monitored.

Dykman’s particularly pleased that 80 per cent of each shelter project was obtained by a B.C. firm and that the list includes local suppliers “These shelters will be in service long after the pipeline is finished. They can be used when crews are doing checks on the line,” said Dykman. #112-4401 BRISTOL RD, TERRACE V8G1P8

What is ...

By Ryan Jensen

I

n 2012-2013, the B.C. Oil and Gas Commission (OGC) issued 1,742 new approvals, completed 4,116 site inspections and oversaw the drilling of 444 wells and 2,185 kilometres of pipeline.

The OGC is projecting 700 new well applications alone will be received in the coming year.

Currently, there are 13 proposed LNG projects in B.C. according to Graham Currie, OGC executive director corporate affairs, and they have also issued some short-term water authorizations and investigative use permits for projects. The provincial government has set a goal of having three LNG facilities in operation by 2020, but the OGC is still waiting to receive the first application for any of the proposed LNG facilities, he said.

See Page 22

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What is ...

The OGC is the provincial regulator of oil and gas activities in the province, including exploration, development, pipeline transportation and reclamation.

It was created as a Crown Corporation by the Oil and Gas Commission Act in 2010.

Their purpose is to be a streamlined, one-stop regulatory agency. The OGC is funded through industry fees and levies.

They also inspect activities as they take place on the ground, such as geophysical operations, construction, drilling, operating wells, pipelines, facilities and gas plants and incidents. The OGC sends compliance and enforcement inspectors out into the field to conduct site inspections and address complaints from landowners, First Nations, the public and other stakeholders.

In addition, the OGC has created documents to help oil and gas companies and individuals understand what tools are available to them during the public engagement process.

In their 2014 budget, the BC Liberals are planning to spend $29 million over the next three years on LNG development and the National Energy Board also approved seven new LNG export applications.

The B.C. OGC employs approximately 225 people at offices in Fort St. John, Dawson Creek, Fort Nelson, Kelowna and Victoria and they have a staff presence in Smithers and Terrace.

The organization has a 24-hour public information and complaints line at 1-250-794-5200.

For more, see their website, www.bcogc.ca.

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ALL HANDS ON DECK FOR THE NEW AGREEMENT. Pictured left to right: Jongkook Lim - KOGAS; Bi Jingshuang PetroChina; Andy Calitz, - LNG Canada; Hiroki Haba - Mitsubishi Corporation; and Jorge Santos Silva - Shell.

LNG Canada marks milestone Starting May 1, 2014, the real hard work began.

On April 30, the partners of the LNG Canada proposal — Shell Canada, PetroChina with KOGAS and Mitsubishi — put pens to paper to formalize the project arrangement.

That arrangement means the creation of LNG Canada Development Inc., which has Shell Canada owning 50 per cent of the project, PetroChina owning 20 per cent, and KOGAS and Mitsubishi owning 15 per cent.

This arrangement, which maintains the original partners to the proposed project, takes the project a step forward as it heads towards a possible final decision in the next couple of years.

There is still work to do before the company can reach that final, crucial milestone. The CEO of the new LNG Canada Development Inc. company, Andy Calitz, said there is still the environmental reviews to undertake, as well as the front end engineering and design study (FEED) and of course a final cost estimate, before a formal nod is given to build the facility.

That work, Calitz said to reporters in the company of Premier Christy Clark and various company partners, can take anywhere from 18 to 24 months. And that work kicked in to high gear on May 1, he said.

So what’s the big deal with this new arrangement? By creating this operating entity, the company can enter into agreements with suppliers and contractors, and it is visible proof that the company is committed to continue the process of project development into the next phase.

“While we are in the early evaluation process and a decision to build the project is still a while away, this agreement reinforces our commitment to developing an LNG facility in British Columbia and allows us to proceed with the next steps in our project assessment,” said Calitz.

“We will need to continue to work closely with the provincial and federal government to ensure that the project is economically viable, as well as working closely with First Nations, the local communities, and regulatory agencies, and move forward on a number of commercial agreements and contracts. We remain cautiously enthusiastic about the potential opportunity in B.C. and look forward to exploring it further.”

At a provincial level, the Premier said this new agreement signals continued momentum for the LNG industry in BC. “We cannot get to that final investment decision eventually if we don’t take this important step that we’re taking today,” she said.

Locally for Kitimat, this announcement coincides with the recent reopening of LNG Canada’s Information Centre, on Ocelot Road, at the former Methanex site.

Premier Christy Clark with Deputy Premier Rich Coleman join LNG executives for the announcement.

This space is a collaborative promotional venture by LNG Canada and N2K Editor Cameron Orr