Buying LNG

FortisBC manages the overall available quantity of LNG that can be contracted for under the Liquefied Natural Gas Sales and Dispensing Service Agreement from its existing facilities and from the proposed Tilbury LNG facility expansion. The available quantity of LNG will depend on FortisBC’s overall LNG liquefaction and storage capacity, and existing commitments, which include peaking and emergency supply requirements for traditional utility markets.

FortisBC offers transportation to LNG domestic customers. Rate Schedule 46 customers who wish to export LNG are responsible for equipment, trucking and shipping arrangements from our Tilbury facility.

FortisBC will provide LNG service to a customer if:

• adequate capacity exists on the FortisBC system
• there is available LNG capacity that is not already committed as contract demand under a Long-Term LNG Service Agreement or Short-Term LNG Service Agreement (as those terms are defined in Rate Schedule 46)
• the customer has entered into a Liquefied Natural Gas Sales and Dispensing Service Agreement

Charges for LNG service are detailed in the Rate Schedule 46 tariff, as updated from time to time.

LNG service charges include a liquefaction charge, which consists of an LNG facility charge and an electricity service charge, plus commodity-related charges including cost of gas, carbon tax and storage and transport.

If the customer receives LNG supply from FortisBC via the optional LNG transportation service, transportation charges will apply as follows:

• LNG tanker charge—a charge per day or partial day for the use of an LNG tanker owned or provided by FortisBC
• LNG tanker hauling charge—a hauling fee based on FortisBC’s cost to contract with a third-party contractor to haul the LNG tanker, plus 15 per cent

LNG is sold FOB (free on board) the production facility. For transportation services there are two options:

1. Customers can arrange for their own tankers or tankers provided by their contractors to pick up at the LNG facility.
2. Domestic customers can receive LNG delivery from FortisBC using our LNG tankers to deliver to their location (subject to certain geographic restrictions). Charges for electing FortisBC’s optional LNG transportation service are summarized in the Rate Schedule 46 tariff.

FortisBC offers spot, short-term and long-term LNG service, which need to be specified in the Liquefied Natural Gas Sales and Dispensing Service Agreement:

• Spot LNG service is available for less than one year or as other non-reoccurring supply.
• Short-term LNG service is defined as a minimum term of one year to a maximum of less than five years in duration and a specified contract demand.
• Long-term LNG service is defined as a minimum term of five years and a specified contract demand for the duration of the long-term service.

In allocating available LNG capacity that is not already committed, FortisBC will give priority based on the length of the contract term, with customers with longer terms having priority over those with shorter terms.

If the desired contract term is the same for more than one potential customer, then FortisBC will prioritize them by volume, with larger-volume customers having priority over smaller-volume ones.

A customer may purchase in excess of the contract demand as spot LNG service, subject to availability of supply as determined solely by FortisBC.

Customers seeking LNG service beyond the contract term must enter into a new Liquefied Natural Gas Sales and Dispensing Service Agreement.