All Hands on Deck
/ Author: Donald Mundy
/ Categories: Guide magazine /
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All Hands on Deck

Northwestern BC is poised to become the new Fort McMurray of Canada. And CLAC members are right at the centre of it

Vince Giesinger and his wife, Summer, faced a hard decision: where should they live and raise their family? Should they move nearly 600 kilometres to Terrace, BC, from Prince George where Vince was offered a position as project coordinator with Westgreen Contracting Ltd.?

Westgreen is one of a number of CLAC-signatory companies to successfully bid for work on LNG Canada’s massive investment in the northern part of the province. Northern BC has immense reserves of natural gas. By turning it into liquefied natural gas (LNG), the company can export this resource to vast markets in Asia looking for cleaner alternatives to coal to power their homes and economy.

But producing LNG requires the construction of enormous facilities to process the natural gas and pipelines to export it. That’s where LNG Canada’s investment comes in, providing opportunity for workers like Vince.

“Summer and I sat down and had a long talk about moving here,” says Vince, who is a Local 68 member. “It wasn’t an easy decision, especially since we had a six-month-old at home who had just come into our lives. But the opportunity for long term work was too good to pass up. There’s four to five years of good work ahead for me—and there’s a good chance we’ll be here much longer than that.”

Vince and his young family are one of many families mulling over their future, now that the largest private infrastructure project in Canadian history has broken ground at the LNG Canada facility in Kitimat, BC. Companies are starting to crew up for construction of the $40 billion project, which is expected to provide employment for over 10,000 workers.

“LNG Canada’s investment provides unprecedented opportunity for CLAC members in British Columbia,” says Kevin Kohut, BC director. “We have lots of members who are excited about the work coming to the northwest, and they’re looking forward to the challenge of building such a prestigious project.”

LNG Canada is an international consortium of five companies that have formed a joint venture partnership to finance and build the massive project. The consortium is headed by Shell and includes Petronas from Malaysia, Petro China, Mitsubishi from Japan, and Korea Gas Corporation. As of April 2019, $3 billion has already been spent on the project.

Neil Leeland, originally from Abbotsford, moved up to the Kitimat area last year and has been working on the project for Ledcor CMI as an equipment operator. Neil serves his fellow Local 68 members as a steward and sits on the Joint Occupational Safety and Health committee.

“The opportunities for work up here are unbelievable,” says Neil. “There is work for thousands and thousands of people. It’s hard to put into words how much this means for families and for communities.”

Less than two years ago, hopes were dashed that an LNG industry would ever get off the ground in BC when Petronas pulled out of its stake in what was then known as Pacific Northwest LNG. Prices for natural gas were at historic lows, and combined with a worldwide glut of production, it looked grim for any imminent investment. This came after years of intense lobbying and courting efforts by the BC government to lure companies to invest.

But in March 2018, the provincial government offered up considerable tax incentives to entice corporations to come to BC. The plan worked and in October 2018, LNG Canada announced its final investment decision for Kitimat.

Phase 1 of the project will be the construction of the 670-kilometre, $6.2 billion Coastal Gas Link Pipeline, which will run from Dawson Creek in northeastern British Columbia across the entire width of the province and end in Kitimat. Agreements are in place with Indigenous communities along the path of the pipeline. Construction of the line is expected to start this fall, and hundreds of Local 68 pipeline construction members are expected to work on the four-year project.

Phase 2 is the construction of the $18 billion gas liquefaction and storage plant facility at the mouth of the Kitimat River on a 250-hectare site. The plant will be built on the traditional land of the Haisla First Nation.

Approximately 400 Local 68 members are currently working in the area on site preparation and road building, with more being hired weekly.

Contracts have not yet been finalized for construction of the main facility, but it is here that 4,500 highly skilled workers will be needed at peak construction.

“We are working closely with our signatories, with numerous Indigenous communities, and with our CLAC Training team to get ready for the big crew up,” says Kevin. “This is an opportunity for people in the northwest to gain skills and experience and further their careers with excellent, high-paying jobs. We are excited to be a part of it all.”

Construction of the massive facility in Kitimat is expected to be completed in 2025. It will produce 14 million tonnes per annum of LNG from two processing units, or trains as they’re called. There is an option to add two more trains to the plant in the future, which would double the capacity. Depending on expansion, the plant will employ between 450 to 800 full-time workers for production.

Another phase of the project is the expansion of an existing wharf at the Port of Kitimat to handle up to two massive LNG marine carriers at a time. The largest of these tankers are over 300 metres long and can carry 226,000 cubic metres of natural gas.

Each tanker will have to traverse a 294-kilometre voyage from the sea up through Dixon Entrance, eventually reaching Douglas Channel and the port at Kitimat. Each tanker will have two certified BC marine pilots on board who are familiar with the local waters, along with a dedicated escort tug guiding the ship the entire trip.

Once near port, two ship-docking tugs will guide the vessels into dock. Marine safety has been paramount in the planning for the project, although the risk of environmental contamination from a possible LNG spill is almost nonexistent.

The project planning and development has undergone some of the strictest environmental reviews in the world.

“I’ve been struck by the measures the companies are taking to protect the environment,” says Neil. “Any time we are anywhere near the water, there are people monitoring our activities. Every effort possible is being taken to minimize the risks.”

LNG Canada claims this facility will have the lowest emission intensity of any large-scale LNG plant ever built. To support this goal, Finance Minister Bill Morneau travelled to Kitimat in mid-June to announce a $220 million contribution from the federal government to LNG Canada for the purchase of more energy-efficient gas turbines to power the natural gas liquefaction plant. Another $55 million is being put toward the upgrade of an aging highway bridge in Kitimat.

All levels of government have a keen interest in the environmental footprint of the project as it will have a significant impact on the amount of greenhouse gas (GHG) produced by the province and by Canada as a whole. Critics of the LNG industry point toward Canada’s commitment to the Paris Agreement, which calls for the country to reduce its GHG emissions by 30 percent below 2005 levels by 2030. The LNG Canada project is expected to add considerably to the national GHG output.

But proponents are buoyed by the fact that LNG from BC will be used to displace coal-fired electrical generating plants in China and other Asian countries. LNG from the Kitimat project would displace anywhere from 20 to 40 coal-fired plants in Asia and reduce global GHG emissions by 60 to 90 million tonnes annually.

One study estimates that for every unit of GHG that British Columbia produces to get LNG to market, the Asian production of GHGs is reduced by a factor of 10. In fact, talks are underway by the federal government to use the carbon offset from the sale of LNG to Asian markets toward the country’s lower emissions target.

The size of LNG Canada's project is massive in scale. What is truly impressive is that more LNG facilities are in the planning phase for the west coast of BC.

Kitimat LNG, a 50-50 partnership between Chevron Canada Ltd. and Woodside Energy International Ltd. made application to the federal government in April 2019 for a 40-year license to export up to 18 million tonnes per annum of LNG from a plant to be built in Kitimat, not far from where LNG Canada is currently breaking ground. Although no final investment decision has been tendered by Kitimat LNG, Local 68 members are already working to construct a road to where the new facility is proposed. Fingers are crossed that the go ahead will come soon.

Kitimat LNG is contemplating the full electrification of the facility, which would be a world first and would significantly lower GHG emissions from the production of LNG. The current technology in use at every LNG plant uses natural gas to produce electricity to power the trains. Natural gas must be cooled to -162°C, at which point it liquefies. But to fully electrify the project, including the 471 kilometres of pipeline that will be built to supply the facility with gas from eastern BC, almost the entire 1,100 MW output of the soon-to-be-completed Site C dam in Fort St. John would be needed.

In southern BC, Woodfibre LNG is expected to release a final investment decision for a smaller scale LNG export facility in Squamish. The $1.8 billion project is being developed by Hong Kong-based Pacific Oil and Gas. The facility will export 0.75 million tonnes per annum of LNG and run for 15 years.

Even Fortis BC, the provincial natural gas supply company, is getting in the game. Plans are underway for a small-scale LNG storage and export facility expansion on Tilbury Island in Delta. In fact, the first ever shipment of LNG from British Columbia to Asia occurred when Fortis shipped a small container from its Tilbury operations in November 2017. Although symbolic in nature, that small shipment is expected to turn into a tsunami of exports in the future.

The economic impact of LNG development for British Columbia and for Canada as a whole is enormous. The Canadian Association of Petroleum Producers (CAPP) estimates that each year the LNG export industry would add $2.4 billion in direct and indirect economic activity and create $340 million in extra tax revenue for provincial and federal governments. In BC alone, the GDP is expected to increase between 0.3 percent and 0.5 percent per year.

Northwestern BC is poised to become the new Fort McMurray of Canada and become one of the key economic drivers for the country. And CLAC Local 68 members are right at the centre of this once-in-a-generation boom.

For workers, the opportunity represented by the LNG industry is about so much more than just the economics. It’s about their lives and the lives of their families and being part of a growing community.

“There are a lot of people moving to this area,” says Neil. “The respect people have for the original residents of Kitimat and Terrace is phenomenal. And the community here has welcomed us with open arms.

“Living here is amazing. The best thing about being up here is living in the mountains. I’m an outdoorsman and everything I love to do—hiking, camping, fishing—it’s all right here. I don’t have to go anywhere. I go to work and when I come home, it’s like I’m on vacation.”

“This is a game changer for me and my family,” says Vince. “And it’s not just us. Everyone I talk to on site, they say the same thing. This project up here means the world to them and their families. It’s transforming people’s lives.”

 

Fast Facts

Natural Gas

  • Natural gas is a hydrocarbon composed primarily of methane.
  • It is formed over the course of tens of millions of years by heat and pressure transforming decaying plant and animal matter (mostly algae and zooplankton) into solid, liquid, or gaseous hydrocarbons.
  • Oil fields are often accompanied by natural gas deposits.
  • Natural gas may also contain varying amounts of other natural gas liquids (NGLs) such as ethane, propane, butane, and pentane.
  • Varying amounts of nonenergy components such as nitrogen, carbon dioxide, hydrogen sulphide, and water are also usually present.
  • NGLs and nonenergy components are removed during processing and before natural gas is transported via pipelines.
  • Natural gas produces 30% less CO2 than oil and 45% less than coal for the same energy output and produces fewer toxic emissions.
  • Natural gas development has been taking place in BC since the early 1950s.
  • Northeastern BC contains approximately 93 trillion cubic metres of natural gas.
  • Methane hydrates, discovered off Vancouver Island in 1985, represent enormous potential for natural gas production that far exceeds conventional reserves.

 

LNG (Liquefied Natural Gas)

What is it?

  • LNG is a natural gas (mostly methane plus some ethane).
  • It is clear, colourless, odourless, noncorrosive, and nontoxic.

 

How is it produced?

  • Natural gas is cooled to -162°C, which causes it to condense into a liquid.
  • LNG takes up only 1/600th the volume of natural gas, which makes it easier, safer, and far more economical to transport.

 

How is it transported?

  • Processed natural gas is piped to terminals where it is liquefied. 
  • LNG is transported on massive, specially equipped freighters and then shipped overseas where it is reheated and converted back into a gaseous state and then piped to where it is needed.

 

Sources: www2.gov.bc.ca, energybc.ca, nrcan.gc.ca, wikipedia.com, cbc.ca

 

Who's Got Gas?

The world isn’t going to run out of natural gas anytime soon, with proven reserves of over 50 years at 2017 production rates. 

Most of that gas is buried under Siberia, with Russia having the highest proven reserves by far. And while Canada is the fourth-largest producer of natural gas, our total reserves, while large, rank only 17th in the world. 

 

Natural Gas Reserves

Rank  

Country

Reserves  (billions of cubic metres, 2017)

 1  Russia  47,800
 2  Iran 33,500
 3 Qatar 24,000
 4 US 8,710
 5 Saudi Arabia 8,600
 6 Turkmenistan 7,504
 7  United Arab Emirates     6,091
 8 Venezuela   5,700
 9 Nigeria 5,284
 10 China 5,194
 17 Canada 2,182

 

Natural Gas Production 

 Rank  

Country

Production (billions of cubic metres, 2017)

 1 US 864
2 Russia 741
3 Iran 232
4 Canada 188
5 Qatar 168
6 China 160
7 Norway 127
 8 Australia 125
9 Saudi Arabia     98
10 Algeria 96

 

Sources: CIA World Factbook, forbes.com, Enerdata Global Energy Statistical Yearbook

 

People of the Snow

Kitimat has always been a natural resources town. The Haisla First Nation has lived off the land in that region for centuries, and the name Kitimat comes from the word Kitimaat, which means people of the snow in the Tsimshian language. Apart from a few other settlers, the region remained sparsely populated until 1950.

Everything changed in 1950, when the Aluminum Company of Canada (Alcan) launched the massive Kitimat-Kemano Project. The company needed to smelt aluminum in an area that was close to a deep-water port and also needed a power source for such an energy-intensive project. Kitimat, located on the Douglas Channel and in the Eutsuk/Ootsa/Nechako River drainage basin, was just the place.

The Kitimat-Kemano Project was the largest privately funded construction project at the time, totalling $500 million ($5.4 billion today). It included

  • Kenney Dam on the Nechako River
  • A spillway
  • A 16-kilometre tunnel as wide as a two-lane highway blasted through the rocks
  • Kemano powerhouse, which includes two penstocks that plunge water 800 metres (16x the height of Niagara’s Horseshoe Falls) to drive the turbines
  • An 82-kilometre power transmission line 
  • 250,000 tonnes-per-year aluminum smelter
  • Year-round deep-water port
  • A town site for 50,000 people
  • A paved highway

 

It was completed in just five years by over 3,500 workers, breaking a number of records, including the largest smelter in the world and BC’s first planned community.  The city planner, Clarence Stein, was instructed to create a community that would attract and retain workers. He ensured the community was separated from industry, and that there would be plentiful green space. 

Today, the main employer in this town of 8,100 remains the aluminum industry, though that is shifting. Kitimat is becoming a hub for a new resource—natural gas. It will be home to LNG Canada’s new natural gas storage and liquefaction terminal.

Sources: kitimat.ca, inflationtool.com, Canadian Encyclopedia, ieee.ca

 

 

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