North Shore gas project inches forward: feasibility study underway for LNG conversion and distribution network.

• Author: Ross, Ian
• Position: Northwestern Ontario

A cluster of communities along the North Shore of Lake Superior are evaluating if it makes sense to introduce liquefied natural gas (LNG) to their heating fuel mix.

Politicians and administrators in the towns of Marathon, Manitouwadge, Schreiber, Terrace Bay and Wawa will be pouring through the findings of a two-part feasibility study due in by the end of June.

The communities on the northeastern shore of Lake Superior--hundreds of kilometres apart--aren't serviced by natural gas.

TransCanada's natural gas pipeline comes as far east as Nipigon. To extend it further along the North Shore would be too costly due to the rugged terrain of the Canadian Shield.

Last year, the communities signed franchise agreements with Toronto's Northeast Midstream LP for a project proposal to extend service to 11,000 residents and businesses through the use of LNG.

LNG is natural gas in a liquid state once it's cooled to -162 degrees Celsius. As a fluid, it's considered easy to store, can be transported long distances and still be economical to use as fuel to generate electricity, heat buildings and power equipment and vehicles.

By utilizing LNG, it's believed the cost of heating homes and fueling businesses in the region can be reduced dramatically.

Rough cost estimates are that the average residential customer in the region could save $1,000 to $3,000 annually compared to other traditional heating fuels.

Besides provides a needed natural gas solution, Town of Marathon CAO Daryl Skworchinski said it provides a valuable tool for economic development purposes.

"For large industrial users in the area, one-quarter of their operating costs is energy. If we can cut a fraction of that off, or in half, we're hoping this will drive new investment. It's a real key piece of the underpinning of why we were so set at moving forward with LNG as an opportunity."

The proposal involves building a gas-to liquid conversion facility at Nipigon with the product being trucked to fuel distribution depots in the individual communities.

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Two reports are being done simultaneously. A socio-economic study will determine if individual homeowners would subscribe to LNG and an engineering report will determine the infrastructure costs. Both reports are due June 30.

Skworchinski has few concerns about the reliability of supply by using the TransCanada Highway for transport.

For one, the natural gas pipeline at Nipigon is on the east side of the Nipigon River, which is...