Natural gas provider inks delivery deals with mining companies: Certarus seeks to displace propane for underground mine heating and power generation.

• Author: Ross, Ian
• Position: Mining

A compressed natural gas (CNG) distributor that's setting up shop in the Timmins area has already signed contracts with three mining operations in northeastern Ontario.

Calgary-based Certarus announced in early October that it was establishing a regional hub near Timmins with plans to develop another in Red Rock in northwestern Ontario to cater to mining and forestry clients. More than 40 jobs will be created across the region.

Stephane Gallant, the company's business developer manager, said they have signed contracts to haul compressed natural gas by truck to Kirkland Lake Gold's Taylor Mine near Matheson; to Imerys' Penhorwood Talc Mine near Gogama; and to an undisclosed third mining client.

Northern Ontario is part of the Western Canadian company's expansion strategy into eastern Canada and the southwestern U.S.

The company delivers CNG to industries without access to a natural gas pipeline.

In competing against propane and diesel suppliers, Certarus is promoting itself as a virtual pipeline provider of a cleaner and affordable fuel for mainly industrial players who consume large volumes of gas.

Gallant said they're targeting mines and mineral processing mills, kilns and dryers, asphalt plants, and large greenhouse operations, especially in southern Ontario where they're searching for a third location.

Certarus taps into the pipelines of their natural gas company partners and compresses the gas to 4,000 psi to truck it to a client's site, where it's decompressed for use in power generation and air heating for underground mines.

The company plans to scale up to 25 jobs in Timmins and 16 in Red Rock, with the potential for more seasonal jobs during the winter peak periods between October and April.

Gallant said they've worked closely with Union Gas in identifying prime areas to locate in the North.

The strategy is to establish regional hubs eight hours apart so as to blanket the province from three locations. Each hub will be staffed with an operations manager, technicians and truck drivers.

Their business model case is based on volume and frequency, in seeking industrial clients who burn a minimum propane-equivalent of 3,000 litres a day.

Gallant said a major mine operation can burn more than 20 million propane-equivalent litres annually, necessitating the need for eight to nine hauls a day.

"We back up the trailer at a client's site and leave it there. We're expecting our clients to burn through it in one to four days."

Each trailer...