KT Energy gets approval for mini modular LNG plant in B.C. to supply off-grid users

Image: KT Energy

Plans for an estimated $18-million LNG plant near Fort Nelson have received regulatory approval.

The BC Oil and Gas Commission granted KT Energy a LNG facility permit in March to build and operate its proposed Fort Nelson plant, expected to start construction next year.

The company says the plant will be able to accomplish on-site natural gas liquefaction from pipeline gas, remote wells, and oilfield associated gas. LNG is then stored and delivered to users’ sites.

“[Approval] is an important step in moving forward on an exciting project that will be good for the economy of B.C. and the north, and for our company,” KT Energy CEO Betty Cheng said in a statement.

The facility, in development since 2015, would be located in the Maxhamish area 130 kilometres northwest of Fort Nelson. It will have an initial capacity of 20,000 gallons of LNG per day, according to the company.

Because the existing natural gas pipeline network ends in Fort Nelson, the company views Fort Nelson as a “gateway” for a long-haul LNG supply for northern B.C., the Northwest Territories, the Yukon, and Alaska. The Alaska Highway and Highway 77 would serve as a “virtual pipeline” to supply natural gas to off-grid communities and industrial and commercial users looking to replace fuels such as diesel with a more economic and environmentally friendly option.

The company says it will manufacture and supply the modular LNG processing equipment for the plant, equipment it says has already been proven in China, where it operates eight similar facilities.

The company hopes to start site preparation and construction next summer, according to Cheng. On-site installation and construction is expected to take one to two months, with the plant scheduled to come online in late 2018. Any subsequent expansions would be tailored to market conditions.

The company still needs to secure offtake agreements for the gas, but it has established contacts with potential customers, Cheng said.

“We are willing to develop the LNG supply chain with partners to stimulate and accelerate the adoption of LNG, making it a preferred option."

KT Energy, based in Vancouver, is a member of Kai Tian Energy Group, a group of companies in China and Canada that has been in the natural gas sector since 2002, according to the company's website.

KT Energy says it plans to build several “mini LNG modular plants” to meet Canadian domestic demand. The Fort Nelson plant would be its first.

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