Hawaiian Utility Signs Agreement for Canadian LNG

Tilbury LNG illustration (courtesy Fortis)

By MarEx 2016-05-19 20:46:25

The utility Hawaiian Electric has signed an agreement with Canadian natural gas firm Fortis, the operator of the Tilbury LNG facility in Delta, British Columbia, for the provision of 0.8 mtpa of liquified natural gas, beginning in 2021. 

"Our small-scale Tilbury facility fits well with the needs of customers like Hawaiian Electric and shipping from Canada's West Coast costs less than from other locations, including the U.S.," said Barry Perry, president and CEO of Fortis.

The 20-year agreement would be contingent on government and regulatory approvals to expand Tilbury LNG and on the merger of Hawaiian Electric with Florida-based utility group NextEra Energy Resources.

The Hawaiian-NextEra merger is opposed by many state agencies and advocacy groups; the state’s public utility commission is expected to issue a regulatory decision towards the beginning of June. 

Hawaiian Electric said that "importing natural gas from British Columbia will decrease its present reliance on imported oil for almost 80 percent of its electricity generation, reduce greenhouse gas emissions significantly and provide a reliable, cleaner, lower-cost fuel for its transition to a 100 percent renewable energy future."

Hawaii's governor, David Ige, opposes Hawaiian Electric's plan to import LNG, and says that it is a distraction from the drive to meet the state's desire to source all of its power from renewable sources by mid-century. 

In 2014, Tilbury LNG began a $400 million expansion project to include a new storage tank and new liquefaction capacity. Fortis says the facility would have to expand again in order to meet export demand. It is in discussion with regulators for the installation of a new high-voltage electricity line to power the plant, and partner WesPac Midstream is working on approvals for a marine loading terminal.

Fortis is also a partner in the pipeline portion of the proposed Woodfibre LNG export facility at Woodfibre, BC.