An innovation that started in concept as a way to improve reliability of power supply to communities in Canada’s north could help create new markets for Western Canada’s glut of cheap natural gas.
In 2010, a natural gas well in the Mackenzie Delta that fuelled one of Inuvik’s two power plants started to have operational issues. This resulted in many sleepless nights for Colin Nikiforuk, the general manager of the Ikhil Joint Venture contemplating alternative natural gas supply options.
In 2013, the Northwest Territories Power Corporation switched the community to a more stable natural gas supply of LNG, trucked in from FortisBC’s Tilbury Island LNG facility, supplementing the diesel-fuelled power plant.
But that wasn’t enough – Nikiforuk wanted to make LNG cheaper and more efficient.
Today he is CEO of PTX Technologies, founded to commercialize what he calls the “supercharged” version of a 160-year-old refrigeration technology that holds promise for both small-scale LNG projects and for natural gas liquids recovery.
“The technology itself is not an LNG technology. It’s a refrigeration technology,” Nikiforuk told JWN on the ground at the company’s pilot facility in southeast Calgary.
“This is a completely different approach to refrigeration. In the small to mid-scale LNG space I think it’s a game changer, and we’re hoping that others see that too.”
The system is based on a modified aqua-ammonia absorption process. Jacobs Consultancy reviewed the technology in summer 2017, finding it “well-suited for small to mid-scale LNG production applications,” and “sufficiently developed to warrant a scale-up.”
The first commercial project that PTX is working on is located about 270 kilometres north of Slave Lake, Alberta, at a gas plant owned by Sonoma Resources (now operating as Sonoma LNG).
The site is far from southern markets “but nice and close” to new mining projects in the Northwest Territories,” Nikiforuk notes.
He says he proposed to Sonoma the idea of converting the plant to a liquefaction facility in about 2014, and the company – a shallow dry gas producer – was “very receptive.”
Initially the plan was to use Sonoma’s own production to feed the LNG process, but it was decided the economics would work better if the project withdrew natural gas from its existing connection to the TC Energy pipeline system.
Sonoma has since abandoned 61 wells in the field and received regulatory approval to convert the plant’s existing equipment into an LNG manufacturing facility. The plan is to process approximately 7.5 mmcf/d of natural gas into 90,000 US gallons per day of LNG.
In terms of scale, that compares to liquefaction capacity of 37 mmcf/d at the recently expanded Tilbury Island, and 1.7 bcf/d for the LNG Canada export project.
Nikiforuk says Talbot Lake is “ready to go” once Sonoma has confirmation of market and funding. The most advanced customer discussions are with Fortune Minerals for its NICO mine, which is planned 160 kilometres northwest of Yellowknife.
NICO would recover cobalt for manufacturing rechargeable batteries used in electric vehicles, stationary power storage applications, and portable electronics, according to Fortune Minerals.
“It’s roughly 1,000 kilometres to the north of our site and it’ll be a location that produces their own electricity for the mine, about 10 MW, and that requires 27,000 gallons per day of product,” Nikiforuk says.
“That one mine would be enough of an anchor for us to move forward with the project at Talbot Lake.”
PTX estimates that using its LNG instead of diesel would save the mine on the order of $10 million annually, in addition to reducing air pollutants like NOx and SOx.
While Sonoma advances the Talbot Lake project, which has a target on-stream date of 2021, Nikiforuk says PTX is looking at additional projects including an Alberta deep cut natural gas processing plant under 10 mmcf/d, and a fuel gas conditioning project in the U.S.