DAILY NEWS Feb 1, 2013 12:01 PM - 0 comments

First-of-its-kind liquefied natural gas facility opens in Alberta

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2013-02-01

CALGARY, Alta. -- A new liquefied natural gas facility has opened in Alberta, which facility owner Encana Corporation says is the first of its kind in the province. The Cavalier LNG facility is located about 15 km east of the town of Strathmore, Alta. and will play a “key role” in providing the alternative fuel to the heavy-duty transportation industry, according to Encana officials.

Eric Marsh, executive vice-president of Encana Corp. and senior vice-president, USA Division, said there is a “very strong value proposition for natural gas use in the transportation sector,” noting that LNG is 20-40% less expensive than gasoline or diesel in many regions. Marsh also pointed to the environmental benefits of LNG, including its production of up to 30% less carbon dioxide emissions than oil and 90% less smog-causing particulate matter.

The Cavalier LNG facility receives its feedstock from Encana's neighbouring Cavalier gas plant. The natural gas is then treated to remove impurities such as water, carbon dioxide and Mercaptan, and thereafter directed into a cryogenic heat exchanger where liquid nitrogen (-196°C) cools the methane to a liquid state (-160°C). The LNG is stored in cryogenic tanks on-site for truck fuelling or bulk tanker loading.

First customers of the Cavalier LNG facility include Calgary-based Ferus Inc., an energy services company specializing in delivering integrated solutions to the energy industry, as well as the Canadian National Railway Company (CN) which last year announced that it is testing two mainline diesel-electric locomotives fuelled principally by natural gas. Encana is providing complete LNG fuelling solutions to CN for this pilot project including the fuel, transportation and equipment. Officials say the CN project is the first of its kind in Canada.

"Natural gas is a viable transportation fuel for the rail sector, and CN's pilot project demonstrates the transportation industry's growing awareness of the economic and environmental benefits of natural gas," said David Hill, Encana's vice-president, operations, natural gas economy. "There is significant growth potential for natural gas in the transportation sector when you consider the sheer abundance of this resource that has been unlocked in North America through huge technological advances in unconventional production. Combining the on-road trucking with the rail and oil and gas supply chain segments represents around 30%, or 22 billion cubic feet per day, of total North American transportation fuel consumption."

As part of Encana's ongoing efforts to commercially develop natural gas for transportation, the company also owns and operates an LNG fuelling station in Louisiana, 10 mobile LNG fuelling stations and seven compressed natural gas (CNG) stations. Officials say the company has also committed to converting its entire fleet of more than 1,300 trucks and passenger vehicles to natural gas. In 2011 alone, the company saved approximately $11 million in fuel costs by using natural gas instead of diesel in company trucks and has converted close to 40% of its drilling rigs.

Last month, Encana announced plans to build a 190,000 litre per day LNG production facility near Grande Prairie, Alta. to produce high-quality LNG fuel specifically designed to supply the high-horsepower (HHP) market used in drilling rigs, pressure pumping services, and heavy-duty highway and off-road trucks.

"Recent announcements by Westport Innovations and Caterpillar Inc. to jointly develop natural gas technology for off-road equipment validates that the HHP segment is gaining momentum and wide market acceptance across North America," added Hill.



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