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Vancouver energy company applies for LNG export licence

A worker uses a small boat to move logs on the Douglas Channel at dusk in Kitimat, B.C., in this Wednesday, Jan. 11, 2012 photo.

Darryl Dyck/THE CANADIAN PRESS

A Vancouver-based energy company has filed an application to export B.C. liquefied natural gas, joining a growing list of projects seeking to ship LNG to Asia.

Canada Stewart Energy Group Ltd. filed its 25-year LNG export licence application Wednesday to the National Energy Board.

The project, with a capacity of 30 million tonnes a year of LNG, would be located near Stewart in northwestern British Columbia.

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Prior to Canada Stewart's application, there were already a dozen B.C. LNG projects vying to become reality, though industry analysts caution that enormous hurdles remain.

The new project, called Stewart Energy LNG, "will comprise floating and land-based natural gas liquefaction plants, LNG storage and marine loading facilities," the proponent said in a submission to the NEB.

Stewart Energy is targeting annual capacity of five million tonnes on the floating vessel, aiming to launch that portion of the project in 2017. The remaining 25 million tonnes a year would be from five land-based facilities.

"Land-based liquefaction trains will require approximately 250 megawatts of power. Stewart Energy is considering various power-supply alternatives, including electric drives (by way of BC Hydro-dedicated transmission line to Stewart), gas turbine power generation or a combination thereof," according to the application, signed by Jialong Gong, Canada Stewart's chairman and chief executive officer.

Industry observers have said that one of the keys to making progress in the LNG race is to persuade Asian buyers to sign long-term contracts to take delivery of LNG in what the industry calls "off-take."

Stewart Energy said it has signed off-take pacts with energy groups in two major Chinese cities. There are also plans for an 800-kilometre pipeline to transport natural gas to Stewart, where the commodity would be super-cooled into liquid form.

"The project will connect natural gas resources in the Western Canadian Sedimentary Basin with the growing global demand for LNG, focusing initially on the Asia Pacific," the proponent said. "The applicant will export gas produced in the WCSB owned by Stewart Energy, project partners and customers using the LNG terminal on a tolling basis."

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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