B-2 Mt. Hayes Liquefied Natural Gas Storage Facility Terasen Gas (Vancouver Island) Inc. Stakeholder Workshop for the CPCN Application June 27 th , 2007 Coast Bastion Inn, Nanaimo BC
Overview • Peak shaving storage facility located near Ladysmith on Vancouver Island • Design and operation similar to current facility located on Tilbury Island in Delta BC • Natural Gas is transported to facility via existing pipeline system during summer months, stored as LNG and Proposed then sent out during winter peaking LNG Storage facility periods • Current project based on 2004 proposal that was approved by the BCUC but subsequently deferred due to termination of Duke Point Power Project 2
Proposed Mt Hayes Facility Capacity 1.5 Bcf Liquefaction 7.5 MMcfd Deliverability 150 MMcfd Capital Investment $176 million Target In-Service Date 2011 3
Welcome – Workshop Agenda Cynthia Des Brisay Director, Business Introduction Development & Resource Planning Project Overview and Guy Wassick , Project Manager Description Gas Supply Portfolio Cynthia Des Brisay TGVI System Benefits Edmond Leung Project Assessment Manager Economic Justification Dave Perttula Manager, Market Development Regulatory Process Tom Loski Director, Regulatory Affairs Review & Next Steps Questions / Discussion All 4
5 Terasen Inc, a Fortis Company
Terasen Utilities Terasen Inc Terasen Inc Ownership Structure A Kinder Morgan Company A Fortis Company Terasen Gas Terasen Gas Terasen Gas Terasen Gas Terasen Storage Ltd Terasen Energy Terasen Gas Inc Terasen Gas Inc (Vancouver Island) Inc (Vancouver Island) Inc (Whislter) Inc (Whistler) Inc Services Inc LNG Storage Facility Management Structure Terasen Gas Inc Terasen Gas Inc Shared Services Agreements Terasen Storage Inc Terasen Energy Terasen Gas Terasen Gas Terasen Gas Terasen Gas Services Inc (Vancouver Island) Inc (Vancouver Island) Inc (Whistler) Inc (Whistler) Inc 6
Project Justification • 2006 Integrated Resource Plan concludes Mt Hayes is a cost effective long term resource for Terasen Gas – Provides long term storage capacity to meet core market peak day growth on Vancouver Island and the Lower Mainland – Reduces dependence on storage facilities located in Washington and Oregon states to serve residential and commercial customers – Avoids transmission facility additions on the Vancouver Island transmission system and the Coastal Transmission System – On-System storage facility enhances reliability and security of supply – Allows the utilities to better manage future industrial and generation demand uncertainty (Island Cogen and Burrard Thermal) 7
Benefits from Mt. Hayes Project - System Capacity and Gas Supply TGVI System Capacity 50 mmcfd 0.5 bcf TGVI TGVI Optimization and Allocation Mt. Hayes LNG of Storage Capacity & Gas 1.5 bcf Deliverability Supply 150 mmcfd 100 mmcfd 1.0 bcf TGI Gas Supply 8
Terasen Gas (Vancouver Island) Inc. Project Description & Overview Guy Wassick LNG Project Manager
Project Description & Overview • LNG Intro & General • Site Selection and Public Consultation • Environmental Assessment • 2007 & 2004 Projects Comparison • Mt. Hayes LNG Storage Facility • Project Schedule & Cost • Project Management • Local Impacts 10
What Is LNG? • LNG (liquefied natural gas) is natural gas cooled until it condenses into a clear liquid. LNG is stored at -162 o Celsius (-260 o F) • at atmospheric pressure in a “thermos” like storage container. • LNG takes up far less space – about 1/600 th of its original volume as a gas. • LNG (the liquid itself) is not flammable or explosive. • When LNG is warmed it evaporates and becomes a lighter-than-air gas and is flammable only when it occurs in a 5% to 15% concentration in air. 11
Types of LNG Facilities • Peak Shaving: LNG storage with liquefaction and vaporization capability; send out on peak days; connected to a pipeline system • Terminals, Import & Export: Large storage capacity and continuous operation; –Export - liquefaction of a pipeline supply to load marine tankers –Import – receipt of marine tanker supply, with base load sendout to a pipeline system • Satellite Plants: For peaking or smaller base load send out; supplied by truck transport; with vaporization capability only • Transportation Fuel: Cars, trucks & buses 12
The LNG Industry • There are over 240 LNG storage facilities operating in the world. • In North America there are approximately 110 peak shaving facilities (3 located in Canada) and 4+ import/export terminals. • LNG storage tanks are insulated tanks, operating at atmospheric pressure and constructed of 9% nickel steel; no tank of this design has failed in service anywhere in the world. 13
14 LNG Facilities – North America
15 “Peak shaving” LNG Plant (1970) - 0.6 bcf Tilbury Island (Delta, B. C.)
16 “Peak shaving” LNG Plant – 0.6 bcf Tilbury Island (Delta, B. C.)
Major Components Of Peakshaving LNG Preheater to Transmission Boil-off Pipeline System Compressor LNG Pumps LNG • Liquefaction Vaporizers (freezer) LNG Tank • Storage (thermos) • Vaporization (hot water tank) Liquefaction Dessication LNG Tanker Unloading & Loading Feed Gas Tail Gas 17
Site Selection Process • Terasen Gas examined a strip of land 5 km on either side of the main natural gas transmission pipeline from the Courtenay area down to the Langford area to locate a storage facility of up to 1.5 bcf. • Based on this analysis, 25 potential sites were identified. • Further analysis of slope, geotechnical characteristics, view sheds and pipeline system hydraulics reduced potential sites to seven, then to three, and then finally the Mt. Hayes site was selected. 18
Final Site – Near Ladysmith LNG Storage • Proposed facility – Storage 1-1.5 bcf – Send-out 100-150 mmcf/d – Liquefaction 5 – 7.5mmcf/d • 6km NW of Ladysmith, West of Mt. Hayes • Located near load center on Southern Vancouver Island 19
20 Storage Plant Location
Consultation Process TGVI undertook a comprehensive public consultation process over a period of 12 months which included the following key elements. • Letters to stakeholders • Meetings with and presentations to stakeholders • 2 focus groups • 3 Open Houses • CVRD sponsored Public Meeting • Environmental and Social Review (ESR) • CVRD Public Hearing Site re-zoning approved by CVRD May 26/04 21
Consultation Process - Ongoing TGVI has maintained communication with interested parties in the community, including direct contact with: • Cowichan Valley Regional District • Chemainus First Nation • Cowichan Tribes • Regional District of Nanaimo • Municipalities of Ladysmith and Nanaimo TGVI’s 2006 Resource Plan which identified the LNG Storage Project as the next major capital addition was widely communicated with TGVI stakeholders. 22
LNG Storage Facility Site Details New zone is U-1, LNG Storage Utility • 42.7 ha (105 acres) rezoned • 12 ha (30 acres) facility fenced site • 20 ha (49 acres), western and eastern buffers, beyond rezoned area will be retained in forestry operations • Total 82 ha (204 acres) will be owned or controlled by TGVI 23
24 Private Property Purchased Property to be purchased 142 ha
25 Rezoned Area Rezoned 42 ha Area
26 Proposed Storage Plant Area Plant area 12 ha
27 Land Owned or Controlled by TGVI Total area 82 ha Exclusion Zone
2007 & 2004 Storage Projects Comparison of Proposed Storage Facilities 2004 2007 Storage Tank Storage Volume 1.0 Bcf 1.5 Bcf Approx. Tank Height 40 m. 40 m. Approx. Tank Diameter 48 m. 60 m. Facility Facility Area 12 ha. 12 ha. Liquefaction Rate 5.0 mmcfd 7.5 mmcfd Max. Sendout Rate 100 mmcfd 150 mmcfd 28
Summary of Project Environmental Impact Significance Impact Significance* Impact Topic Unmitigated Mitigated P HYSICAL E NVIRONMENT • Geology and Soils N N • Natural Hazards N N • Water and Aquatic Systems S N • Air Quality and Climate N N B IOLOGICAL E NVIRONMENT • Vegetation S N • Wildlife N N • Fish and Fish Habitat N N * N = Not Significant S = Significant B = Beneficial N/A = Not applicable, project design and construction standards incorporate these requirements U = Unknown due to lack of information 29
Summary of Project Environmental Impact Significance Impact Significance* Impact Topic Unmitigated Mitigated H UMAN E NVIRONMENT • Urban and Rural Settlement N N • Transportation N N • Forestry N N • Recreation N N • Archaeology N N • Aesthetics N N • Noise N N • Domestic Water Supply N N • Economic Effects B B * N = Not Significant S = Significant B = Beneficial N/A = Not applicable, project design and construction standards incorporate these requirements U = Unknown due to lack of information 30
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