FortisBC starts construction of expanded Tilbury LNG Facility

Oct 21, 2014

$400-million expansion will significantly increase natural gas liquefaction and storage capacity to support growing demand for B.C. LNG

​SURREY, BC – FortisBC – a subsidiary of Fortis Inc. (TSX:FTS) – officially started construction of its $400-million Tilbury LNG Facility expansion project today. The company is adding 1.1 million gigajoules of liquefied natural gas (LNG) to storage and 34,000 gigajoules per day of liquefaction capacity.

FortisBC marked the occasion with a ground-breaking ceremony attended by The Honourable Christy Clark, Premier of British Columbia; Delta Mayor Lois Jackson; as well as Scott Hamilton, MLA North Delta; and Vicki Huntington,
MLA South Delta.

FortisBC Energy Inc. operates the only two LNG facilities in Western Canada. The existing Tilbury LNG Facility opened in 1971 and has safely operated in Delta, B.C. for the last 43 years. The expanded liquefaction plant will be powered by electric drives and the facility will be air-cooled eliminating the need for cooling water.

The expansion allows FortisBC to meet the growing demand for natural gas for transportation, as an energy solution for remote communities and for the marketplace. The project also supports the Government of British Columbia’s goal of creating a strong LNG industry in the province.

“As demand for natural gas increases around the world, British Columbia is uniquely positioned to take advantage. FortisBC’s investment is a vote of confidence in B.C.’s growing LNG industry, both for export and domestic use,” said Premier Christy Clark.

Over the last five years, FortisBC has seen a significant growth in the demand for natural gas from the transportation sector as companies look to reduce fleet costs and curb greenhouse gas emissions.

To date, FortisBC has announced more than $17.5 million in incentives for approximately 400 heavy-duty LNG and compressed natural gas (CNG) vehicles, as well as incentives for five marine vessels. Heavy-duty customers Vedder Transport Ltd., Arrow Transportation Systems Inc. and Denwill Enterprises Inc. acquire LNG from the existing Tilbury LNG facility.

FortisBC LNG is also increasingly being used as a cleaner, more efficient and less expensive energy source by remote communities with no access to natural gas pipeline systems.

Inuvik in the Northwest Territories is offsetting its diesel-fuel utility operations using LNG transported from Tilbury. Residents of Revelstoke could also soon enjoy more stable energy bills and cleaner burning fuel, pending the results of FortisBC’s evaluation followed by a BC Utilities Commission application to convert the community to natural gas from piped propane.

FortisBC is in a unique position to meet demand by leveraging its existing infrastructure to rapidly and cost-effectively increase the supply of LNG to these growing markets.

FortisBC’s parent company Fortis Inc. has long seen the potential in British Columbia and has approximately $8 billion invested in B.C. energy infrastructure which directly benefits B.C. taxpayers. In 2014 alone, Fortis Inc. will invest another $600 million in B.C.

“Our investments and the market potential for LNG as a more cost-effective and environmentally-friendly fuel source provides benefits for British Columbians – including our existing utility customers,” said John Walker, Executive Vice
President, Western Canadian Operations, Fortis Inc. “FortisBC LNG is helping B.C. businesses increase their competitive position, while the increased demand will bring rate benefits for our nearly one million natural gas customers across the province.”

Additional volumes of natural gas moving through FortisBC’s pipeline system as a result of this increased LNG demand will result in better year-round utilization of FortisBC’s infrastructure and help keep natural gas delivery rates stable for all customers, added Walker.

The expansion will bring job creation and economic benefits to the community of Delta.

“The expansion of the Tilbury LNG Facility will bring skilled jobs to our community, providing further opportunities for growth amongst our local trades and technical sector," said Mayor Lois E. Jackson. "This prime location and excellent infrastructure truly position Delta as the municipality of emerging opportunities."

Construction will begin immediately. FortisBC anticipates that LNG from the expanded facility will supply transportation customers by the fourth quarter of 2016.

FortisBC has started construction of its expanded Tilbury LNG Facility. From left to right: Michael Mulcahy, President & CEO, FortisBC; Barry V. Perry, President, Fortis Inc.; Christy Clark, Premier of British Columbia and John Walker, Executive Vice President, Western Canadian Operations, Fortis Inc.

Rolf Lyster, FortisBC Director of Gas Plant Operations, left, guides Premier Christy Clark on a tour of the existing Tilbury LNG plant.

The expanded Tilbury LNG Facility includes an additional 1.1 million gigajoules of LNG storage and 34,000 gigajoules of liquefaction capacity per day. The expansion will significantly increase natural gas liquefaction and storage capacity to support growing demand for B.C. LNG.

 

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