FortisBC, a subsidiary of Fortis Inc. (TSX: FTS) commends the B.C. government for changes announced today that will help to increase FortisBC's ability to rapidly and cost-effectively supply liquefied natural gas (LNG) to the B.C. marketplace.
The changes include updates to the greenhouse gas reduction regulation and directions to the BC Utilities Commission (BCUC), including the exemption of the planned expansion of FortisBC's Tilbury LNG facility from a certificate of public convenience and necessity review by the BCUC.
"Today's direction from government allows FortisBC to better support the province in the development of natural gas for the transportation sector. This announcement will also result in increased LNG supply, creating opportunities for industrial users and remote communities, bringing economic development and new jobs to B.C." said John Walker, president and CEO of FortisBC.
"Government's announcement, also positions FortisBC to move forward immediately with plans to expand our Tilbury LNG Facility. This project contemplates an investment of up to $400 million," said Walker.
The investment in the FortisBC Energy Inc. gas utility would be subject to FortisBC Board approval and additional regulatory and environmental permits and approvals, including the B.C. Oil and Gas Commission. The expansion is expected to include a second tank and a new liquefier, both to be in service by mid-2016.
The expansion will add approximately one million gigajoules of LNG storage, as well as 30,000 to 60,000 gigajoules of liquefaction capacity per day. It will also provide 300 person-years of construction jobs and about $4 million a year in taxes paid to various levels of government over time. FortisBC expects to finance the expansion as part of its natural gas regulated rate base.
"Government wanted to get out of the way and allow the transportation fuel component of the LNG industry develop quickly," said Bill Bennett, minister of energy and mines and minister responsible for core review.
"This $400-million investment in FortisBC's Tilbury LNG Facility will build B.C.'s marketplace for the world's cleanest fuel, LNG, and create over 300 person-years of employment in the Lower Mainland."
As part of government's direction, the BCUC will set the LNG dispensing rate at $4.35/gigajoule. This will help the transportation sector transition to adopt LNG as a fuel source and allow Northern and remote communities to switch to LNG, away from fuels like diesel.
FortisBC expects that its gas utility customers will benefit from the additional volumes moving through the pipeline system to serve the expanded LNG facility.Better year-round, utilization of FortisBC's infrastructure, especially during the summer months when heating requirements are reduced, helps to keep natural gas delivery rates stable.
FortisBC Energy Inc. is a regulated utility focused on providing safe and
reliable energy, including natural gas and propane. FortisBC Energy Inc. employs almost 1,800 British Columbians and serves approximately 945,000 customers in 125 B.C. communities. FortisBC Energy Inc. is indirectly wholly owned by Fortis Inc., the largest investor-owned distribution utility in Canada. FortisBC Energy Inc. owns and operates approximately 46,000 kilometres of natural gas transmission and distribution pipelines. Fortis Inc. shares are listed on the Toronto Stock Exchange and trade under the symbol FTS.
