North Shore Natural Gas Project takes 'critical' step in getting low-carbon energy to northern communities

Lakeshore Natural Gas, a local distribution company for five communities along Lake Superior's north shore, said Wednesday it has signed a letter of intent for a long-term natural gas supply agreement with Certarus Ltd, ruling out the use of liquefied natural gas (LNG).

The latest development in the North Shore Natural Gas Project is a big step toward supplying low-carbon energy to Marathon, Terrace Bay, Schreiber, Manitouwadge and Wawa.

The agreement with Certarus involves the transportation, storage and supply of compressed natural gas (CNG) for the proposed gas project.

"This was really critical in moving the project forward," Daryl Skworchinski, Marathon's chief administrative officer and president of Lakeshore Natural Gas, said in an interview with CBC.

The Certarus partnership "allows us to move forward on two other fronts," he said. "One is to get to the financing strategy, and the second is to obviously from there move to the [Ontario Energy Board] approval process for our Phase 2 application." 

Next steps in 'shovel-ready' project

The proposed $55-million North Shore gas project aims to provide thousands of customers, including residences and businesses, with a cleaner and more affordable energy source.

According to Lakeshore Natural Gas, the gas would be compressed at a Certarus plant in Red Rock, Ont. It would then be trucked to each community and piped through distribution systems, which would would be built in each community.

Skworchinski said the North Shore gas project is shovel-ready, with the final regulatory and financing approvals expected in the coming months.

In a statement, Curtis Philippon, CEO and president of Certarus, said: "Certarus specializes in safely delivering low carbon energy wherever our customers need us." 

He said the municipalities' remote location might have previously made energy security an issue, but "we are pleased to help them transition to a clean energy future with a safe and secure supply of CNG to fuel their homes and businesses."

Liquefied natural gas plant ruled out

Over the past five years, the north shore municipalities have been pressing the Ontario government for natural gas services to support economic development, and reduce high heating and energy costs.

In 2019, the province announced a nearly $30-million investment in the construction and operation of an LNG plant near Nipigon, Ont., as a supply source for the five communities.

However, Skworchinski said, the OEB ruled out the LNG method early in Phase 1 of the competitive process that wrapped up in 2020, with Certarus winning out.

Skworchinski said being able to bring natural gas to north shore communities will make a "tremendous" difference for residents and businesses.

"You see a hydro bill or you see a power bill that is $90 a month, whereas in our community it's not unusual to see $1,000 a month depending on the weather we get. From a residential perspective, it has tremendous savings for our local residents."

If the project gets all the Ontario regulatory and financial approvals this year, it would roll out over three years, with completion slated for 2024.