Calgary company may construct liquefied natural gas depot in Whitehorse

An Alberta natural gas company said the company is considering building a depot in Whitehorse for liquefied natural gas (LNG). 

Ferus Natural Gas Fuels Inc. is based in Calgary, and has a production plant in Grande Prairie, Alta. It currently provides LNG for Yukon Energy's two backup generators in Whitehorse, and to Inuvik, N.W.T., as well.

Blaire Lancaster, the company's vice-president of business development and corporate affairs, said the company is bullish about opportunities in communities that currently use diesel fuel. 

"We're working with the town of Inuvik, and there's more opportunity there," she said, explaining that could include increasing supply in Whitehorse, and looking at how remote communities and mines could benefit from LNG.

"There's a lot of opportunity in the North — in the Yukon, Northwest Territories, and Alaska."

Lancaster said Ferus produces about 189,000 litres of LNG daily. She said when the plant is expanded next year, it will produce around an extra 378,000 litres a day. 

Right now, the company trucks LNG up the Alaska Highway, from its plant near Grande Prairie.

Lancaster said with such a long supply chain — it's about 2,700 kilometres from Grande Prairie to Inuvik — it makes sense to have a depot in Whitehorse to store LNG.  

"We are working with Yukon Energy, assessing the demand from Yukon Energy and from other potential end users in the area to make the case for investing in this LNG infrastructure in Whitehorse," she said.

Lancaster said that, last winter, Ferus delivered an average of two truckloads — or, about 67,000 litres — of LNG per week to Yukon Energy's turbines.

LNG cheaper, cleaner than diesel, company says

Lancaster said LNG is a good alternative to diesel — it's about 30 per cent cheaper, and has about 30 per cent fewer emissions. She said it should be even more appealing once the carbon tax is introduced.

"The carbon tax actually increases the economic advantage of using LNG over diesel, because the carbon emissions are lower on LNG." 

I think the growth is only going to continue.- Blaire Lancaster, Ferus Natural Gas Fuels Inc.

Lancaster said a Whitehorse depot would serve as a central supply point for the North, however, details such as location or scale haven't been discussed.  

"We're just exploring and looking at what this would look like, and working with [Yukon Energy] on that, but can't comment yet on size of the depot," she said.

Lancaster said many northerners might be unfamiliar with LNG, and she argues it's a good time to introduce a new energy source.

"The supply chain is there, we're doing it, and it's working. And I think the growth is only going to continue," she said.

Could mean savings, Yukon Energy says

Andrew Hall, president and CEO of Yukon Energy, confirmed the company is contemplating the benefits of an LNG depot in Whitehorse.

Last month, Yukon Energy officials appeared before the Yukon Utilities Board. The board asked the the company about its resource plans — which include the possibility of a depot — and how that would affect Yukon Energy's bottom line. 

"The availability of local LNG storage would enable the removal of the storage and processing facilities from the scope of a greenfield [new] thermal plant," the company said in response. "Consequently, it could make a new natural gas fired generating plant financially more attractive."

Hall told CBC a depot would "allow the company to bring a larger volume up, and improve the economies of scale."

"It's a development which would bring savings to [Yukon Energy], and to the ratepayers," Hall said.