With the recent drop in oil prices, some may wonder if using liquefied natural gas (LNG) remains a competitive choice for the transportation sector and remote communities. Despite the recent declines in the price of crude, LNG is still about 50 per cent less than the wholesale price of diesel.
What may be of interest to residents of Delta is that the majority of LNG used in the province is produced in Delta at our Tilbury facility, which has been operating safely since 1971.
In fact, due to growing customer need, we broke ground last fall at the Tilbury LNG facility. The $400-million expansion will see the addition of a second storage tank with storage capacity of 1.1 million gigajoules and 34,000 gigajoules per day of additional liquefaction capacity. We expect this to be complete in fall 2016.
This project will result in a number of benefits for residents of Delta. The project is expected to employ 160 full-time workers each year for two years of construction. Last October, the Delta Chamber of Commerce hosted an event where our project contractor provided an opportunity for local suppliers to get involved with this project. One hundred and ten members came out to learn about opportunities.
Following commissioning, the facility will be home to a number of fulltime permanent positions. FortisBC is also upgrading the water supply infrastructure in the area, repaving the surface of Hopcott Road, upgrading the river dike and adding public sidewalks and street lighting to surrounding streets.
B.C. businesses are increasing their competitive position through LNG, which comes from the Tilbury LNG facility. In 2014, Seaspan Ferries Corporation, which operates in Delta, ordered two new dual fuel ferries and signed on for an LNG supply agreement from FortisBC. Earlier this year, B.C. Ferries announced an agreement with us to supply LNG for three dual fuel engine ferries.
Even with the drop in oil prices, B.C. Ferries expects to realize significant savings, which will help with reducing operating costs. B.C. Ferries is also in the process of converting its two Spirit class vessels to dual fuel.
Heavy-duty transportation customers such as Vedder Transport, Arrow Transportation Systems and Denwill Enterprises acquire LNG from the Tilbury facility.
In addition to the cost benefits, these businesses may see a 15 to 25 per cent reduction in greenhouse gas emissions over diesel; it's cleaner, with less particulate matter.
It is for these reasons FortisBC believes LNG remains an attractive energy solution for B.C. and beyond. The increased volume of natural gas through our existing infrastructure as a result of projects like this will also lead to reduced rate pressure for our natural gas customers.
With the changing energy demands of the transportation sector, LNG provides both cost and environmental advantages for all of our natural gas customers while contributing to a strong and prosperous B.C. economy.
Michael Mulcahy is president and CEO of FortisBC, a regulated utility focused on providing safe and reliable energy, including natural gas, electricity and propane. FortisBC employs more than 2,200 British Columbians and serves approximately 1.1 million customers.
