An emerging LNG industry offers an opportunity to bring economic benefits to Canadians
What is Liquefied Natural Gas (LNG)?
Natural gas, when produced and used domestically, is shipped in its vapour form through a network of distribution pipelines to a local distribution company and then delivered to a customer.
When natural gas is shipped to a distant foreign market outside of where it is produced, the natural gas needs to ‘shrink in size’ or be compressed in order to ship large volumes economically – this liquefies the natural gas. The ‘shrinking’ of natural gas reduces its size by a factor of about 600. The ‘shrinking’ is done through the LNG process.
As the majority of Canada’s natural gas resources are in B.C. and Alberta, the best place to establish new LNG processing and shipping facilities is on Canada’s West Coast, which is also close to potential new markets in Southeast Asia, India and China.
Global markets for LNG are expected to expand by the mid-2020s. In the past decade, about 20 LNG facilities were proposed for development on Canada’s West Coast, but most have been cancelled or deferred. Currently only two LNG facilities are in progress on the West Coast, two others are proposed, and three others are proposed for Canada’s East Coast and in Quebec.
Significant potential economic benefits from establishing a Canadian LNG industry and resulting natural gas development could be generated across Canada if natural gas projects are established in a timely manner with access to international markets.
Creating jobs in Canada's natural gas industry
Developing and exporting LNG from Canada would not only help meet growing global energy demand with cleaner-burning natural gas, but would also provide Canadian jobs. Upstream activities supporting one LNG plant in B.C. exporting two billion cubic feet per day (Bcf/d) would provide 20,000 direct, indirect and induced B.C. jobs. (Source: Conference Board of Canada)
The LNG opportunity for Canada's Indigenous Peoples
Indigenous communities will see a significant increase in economic benefits, skills training and environmental stewardship if proposed natural gas pipelines and LNG infrastructure projects proceed within their traditional territories.
In British Columbia, for example, nearly 90 per cent of the 32 First Nations with proposed pipelines through their traditional territories have indicated their support through one or more pipeline benefits agreements. (Source: Government of British Columbia)
The LNG process
There are three primary phases involved in LNG:
Phase 1 – Liquefaction
Liquefaction or shrinking begins after natural gas is transported via pipeline from the natural gas field to the liquefaction facility. Here impurities are removed leaving a product that is primarily methane with small amounts of nitrogen and other hydrocarbons. The natural gas is cooled to about -161°C when it becomes liquid. The liquid natural gas is stored in insulated tanks to keep it cold until it is ready to ship.
Phase 2 – Transportation/storage
At the liquefaction facility, the liquid natural gas runs through a pipeline where it is pumped into double-hulled LNG carriers designed for long marine hauls. These carriers are designed to keep the liquid natural gas cold and minimize evaporation. LNG carriers can hold up to 9.4 million cubic feet of LNG, which is equivalent to 5.6 billion cubic feet of natural gas in its natural gaseous state.
Phase 3 – Re-gasification/storage
When the LNG carrier arrives at its destination, the LNG is offloaded and stored in insulated storage tanks to keep it cold. When needed, the LNG is warmed to convert it back to a gaseous state and is then delivered by pipeline to customers.
Key facts about LNG:
- Natural gas is cooled to -161°C when the natural gas becomes liquid.
- LNG is a clear, colourless, odourless, non-toxic liquid.
- LNG reduces its volume by about 600 times from the gaseous state.
- LNG carriers can hold up to 9.4 million cubic feet of LNG, which is equivalent to 5.6 billion cubic feet of natural gas in its natural state.
- More than 135,000 LNG carrier voyages have taken place without major accidents, safety problems, or security issues either in port or at sea. (Source: Centre for Liquefied Natural Gas)
- Asian markets are an eight-day to 11-day sail from proposed LNG facilities on Canada’s West Coast.
Shipping LNG safely
LNG shipping has a proven safety record. The world’s first LNG tanker shipped LNG safely from Louisiana to the United Kingdom in 1959. Through 50-plus years of marine shipping experience, more than 135,000 LNG carrier voyages have taken place around the world without major accidents, safety problems, or security issues, either in port or at sea. (Source: Center for Liquefied Natural Gas)
LNG carriers are designed to have a high degree of safety. This is accomplished by:
- Using double hulled vessels.
- Separating LNG cargo tanks from the hull structure using thick insulation.
- Installing closed cargo systems for loading or discharging, to prevent the venting of vapours.
- Temperature and pressure monitoring.
- Gas detection and cargo tank liquid level indicators.
Success Story – Using LNG at home
In 2017, BC Ferries introduced three new Salish Class vessels to its fleet: The Salish Orca, Salish Eagle and Salish Raven. These vessels are capable of running on LNG as a fuel source. BC Ferries says the conversion to LNG saves money and reduces CO2 emissions by 12,000 tonnes annually, which is the equivalent of taking 2,500 vehicles off the road per year. The ships service the Tsawwassen – Swartz Bay run, the busiest route in the fleet.