Kitimat LNG receiving terminal on B.C. coast gets initial financing
A private holding company, backed by Canadian, U.S. and European investors, has successfully completed an initial round of financing in its bid to open a C$500 million LNG receiving terminal on the British Columbia coast by late 2008.
Galveston LNG has locked up a C$50 million equity and credit facility which allows the project to continue its environmental assessment process, along with the engineering, procurement and construction contract phase, company President Alfred Sorenson told a Calgary LNG conference Jan. 24.
He said the environmental process was started last September and will take 12 to 18 months, while front-end engineering and design is due to start within 12 months and last until about August 2006.
The terminal is planned for the all-season deepwater port at Kitimat, which has 10 miles of usable waterfront and can handle ships of 325,000 dead weight tons.
Sorenson is confident the Pacific Coast Terminal project will avoid the NIMBY opposition that has derailed projects in eastern Canada and the United States, noting the local residents and the British Columbia government support the plan, while a fast-track program will pull the Canadian government along.
The plans call for 610 million cubic feet per day of send-out capacity at the regasification facility.
The terminal will likely have room for 1.6 billion cubic feet per day of supply, with trunk line access to 11.5 billion cubic feet per day of market: 3 billion to Alberta and British Columbia, 2.5 billion to the Pacific Northwest and 6 billion to California. Two tanks with 6.8 billion cubic feet of storage are being worked into the design.
Sorenson said shipping distances bolster the economics, with Australia 15 days away by ship, Sakhalin Island 7.5 days and Alaska two days. Company officials have previously indicated they hope to acquire LNG from Indonesia, Malaysian and Australia.
Terminal also planned at Prince RupertGalveston faces competition from WestPac Terminals, which has plans for a receiving terminal at Prince Rupert, about 60 miles from Kitimat.
It entered into a 30-year lease in December with the Prince Rupert Port Authority, gaining exclusive rights to 250 acres of industrial land on Ridley Island for the terminal.
WestPac, with Moneta Capital as a partner, has talked about a C$200 million project to handle 300 million cubic feet per day of gas, importing LNG from the Pacific Rim for sale to major North American markets, starting in 2009.
Thomas Valentine, head of the LNG group at the Calgary law firm of Macleod Dixon, told the conference that Canada has an edge over the United States because its extensive coastline limits the impact of LNG regasification plants on communities, reducing the chances of opposition.
He said Canada also has a streamlined, highly developed regulatory system that gives communities a chance to get involved before misconceptions are developed.
Valentine said the residents of Kitimat, faced with the loss of traditional industries, are eager to take advantage of new economic opportunities.