Canada’s natural gas industry has made a major step forward in efforts to export much needed supply to energy-hungry markets in Asia.

The key is the completion of the Coastal GasLink pipeline at the end of 2023.

The project, nearly 12 years in the making, is Canada’s only natural gas export pipeline to the west coast.

It will deliver supply to the port of Kitimat, about 1,400 kilometres northwest of Vancouver. There it will be supercooled and turned into the lowest carbon liquefied natural gas (LNG) in the world and shipped across to global customers from the export facility. That facility is expected to begin operations next year.

It is estimated that the two projects could reduce between 60 to 90 million tonnes of global emissions per year by replacing coal-fired power in Asia

“Coastal GasLink reached mechanical completion in early November 2023 ahead of schedule and is ready to deliver natural gas to LNG Canada’s facility, which will depend on their own commissioning process,” said Natasha Westover, manager of external relations for TC Energy

“Which means, sustainably produced LNG could be shipped to global markets by 2025, via this world-class, safety-leading pipeline.”

The project continues momentum for economic reconciliation with Indigenous communities, with Coastal GasLink set to become one of Canada’s largest infrastructure projects with Indigenous ownership.

Once the pipeline is in service, 17 of the twenty First Nations along the pipeline route have signed an agreement for the option to buy a 10 per cent stake.

“The opportunity was made available to all 20 Indigenous communities holding existing agreements with Coastal GasLink and is an important step on the path to true partnership through equity ownership in the project,” Westover said.

The ownership stakes are in addition to numerous agreements and contracts reached with Indigenous communities along Coastal GasLink’s path. In all, the project spent $1.8 billion with Indigenous and local businesses.

According to TC Energy, the project created more than 25,700 full-time equivalent jobs and took 55 million hours to complete. The project generated $3.2 billion to B.C.’s GDP, some $331 million in tax revenue, and $3.95 billion in spending with B.C. businesses and suppliers.

As well, during construction, Coastal GasLink and TC Energy spent over $13 million in community investments and sponsorships to support local and Indigenous community initiatives.

Once operating, it is estimated that over $26 million in annual tax revenue will be generated for communities along the pipeline’s path. Even with construction coming to an end, local communities will continue to see economic spinoffs. More than $42 million is expected to be generated each year through local economic activity.

“These accomplishments mark the end of the project’s five-year construction phase, during which time our workers, contractors, Indigenous and local communities collaborated to complete Canada’s first pipeline to the west coast in 70 years,” Westover said.

Work will now continue on environmental reclamation and preparing communities and workers for the start of operations.

“Coastal GasLink looks forward to continuing to be a part of the local community as we prepare for safe operations for decades to come,” Westover said.

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With energy security top of mind, liquefied natural gas (LNG) projects in Canada, and B.C. in particular, are making progress.

A lesser-known project, Tilbury LNG, has been operating near Vancouver since 1971. Originally used to store LNG to ensure uninterrupted energy supply for local customers during peak demand, it now also produces LNG to fuel BC Ferries and Seaspan Ferries while producing lower emissions.

Tilbury is B.C.’s first LNG project to export to China, a milestone reached in 2017 using container shipping. using container shipping.

Tilbury is developing two expansion projects, after adding 46,000 cubic metres of extra storage capacity for LNG and liquefication capacity of 250,000 tonnes of LNG per year in 2019.

Owner FortisBC is in the planning process for an expansion adding up to 650,000 tonnes of liquefication capacity and upgrading a natural gas supply line. Construction is expected to start this year and be completed by 2026.

Tilbury’s Phase 2 project will expand its storage capacity to around 142,400 cubic metres of LNG and up to 2.6 million tonnes of annual LNG production capacity. This portion of the project is currently weaving its way through an environmental assessment with the federal government’s Impact Assessment Agency and B.C.’s Environmental Assessment Office. FortisBC is also conducting ongoing engagement with local and Indigenous communities.

In February, the company and the Snuneymuxw First Nation inked an agreement that will provide “educational opportunities, relevant training and continued investment in the community.”

“Coming together to establish an agreement like this takes time and a lot of thoughtful discussion, but I know it is worthwhile,” FortisBC CEO Roger Dall’Antonia said in a statement.

“Contributions from Snuneymuxw will ensure FortisBC can plan and build Tilbury projects that will help minimize environmental impacts and create benefits that will help support the Snuneymuxw community.”

In August of last year, FortisBC and the Musqueam Indian Band signed a benefits sharing agreement for the expansion projects as well as the Tilbury Marine Jetty, which would enable ship-to-ship LNG fuelling. The agreement includes options for the Musqueam to acquire equity ownership in the projects.

Musqueam Chief Wayne Sparrow noted in a statement that “For thousands of years, Musqueam has lived along a trading route and supported trade in the region. Through our relationship with FortisBC, we are building on this strength while being leaders in energy stability and ensuring benefits for future generations.”

Being powered by hydroelectricity makes Tilbury one of the cleanest sources of LNG production in the world. According to FortisBC, LNG production emissions from Tilbury are about 30 per cent lower than the global average.

A lifecycle analysis using tools like the Pembina Institute’s B.C. Shale Scenario shows the expansion could reduce global emissions by up to 800,000 tonnes per year. This is nearly 4.3 times the emissions operations are expected to produce, according to the detailed project description submitted to the relevant environmental assessment agencies.

The use of LNG as marine shipping fuel also has an added benefit of being much cleaner than other  sources like heavy fuel oil. According to an analysis by environmental consultancy Sphera, when LNG IS used for shipping it reduces air pollutants like nitrogen oxides and particulate matter by over 90 per cent, and sulphur oxide levels drop to nearly zero.

According to FortisBC, LNG from Tilbury will reduce greenhouse gases by up to 27% compared to other marine fuels. Currently there are 837 LNG capable vessels operating across the globe, with 781 new ships on order. With this capacity increase, Tilbury could become a key stop off point for LNG powered vessels.

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