FortisBC has inked its first term contract to ship liquefied natural gas to China.
Independent shippers have exported LNG produced at FortisBC’s Tilbury plant to China since 2017, but those shipments have mostly been test and spot market sales.
FortisBC has now inked a two-year contract with Top Speed Energy to ship 53,000 tonnes of LNG per year to China, until 2021.
“It’s been more on a spot basis, and it’s been a number of different companies testing logistic chain and everything,” said Doug Stout, FortisBC’s vice-president of market development and external relations.
“So from our view, this one, with a two-year commitment – and Top Speed has also committed to put more money into buying ISO containers – it shows, I think, the viability of the market.”
The gas will mostly be used by industrial and commercial users in China, Stout said.
“It replaces coal, for the most part, in localized small and mid-scale industrial applications,” Stout said.
The LNG will be shipped via ISO containers, which can be moved by container ship, as opposed to the specialized tankers used for shipping larger volumes of LNG. Top Speed will ship out 60 ISO containers each week.
FortisBC’s Tilbury Island LNG plant, which was originally used strictly for producing LNG for backup, underwent a $400 million expansion. The plant can now produce up to 250,000 tonnes of LNG per year, which is minuscule compared to the 26 million tonnes per annum that the LNG Canada plant in Kitimat will produce.
FortisBC is already looking into another expansion to double the plant’s capacity. In addition to a developing an LNG export market, FortisBC also thinks there is a good potential market for LNG bunkering for the marine sector.
