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GRANISLE BRITISH COLUMBIA a FEASIBILITY STUDY to CONVERT the COMMUNITY from PROPANE to NATURAL GAS Craig T Sears Apri12013 © Cr

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GRANISLE BRITISH COLUMBIA a FEASIBILITY STUDY to CONVERT the COMMUNITY from PROPANE to NATURAL GAS Craig T Sears Apri12013 © Cr GRANISLE BRITISH COLUMBIA A FEASIBILITY STUDY TO CONVERT THE COMMUNITY FROM PROPANE TO NATURAL GAS by Craig T Sears PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION UNIVERSITY OF NORTHERN BRITISH COLUMBIA Apri12013 © Craig T Sears, 2013 U~SITYof~RN BRITISH COLUMBIA UBRARY Prince George, B.C. Abstract Natural gas is a relatively clean burning reliable source of energy as compared to other fossil fuels, and is used to heat millions of homes across Canada. In recent years the oil and gas industries have developed procedures for extraction of natural gas using unconventional methods that have resulted in proven vast reserves in Canada. These vast reserves are driving the cost of the energy source to record low prices. Choosing natural gas for space, water and process heating in the residential, commercial and industrial sectors can decrease the demand for electricity generation. This can improve the overall efficiency of energy utilization and reduce greenhouse gas emissions. (CAPP, 2012) With the reduced cost of this energy source coupled with recent technological improvements in the compression and transportation of natural gas, the ability to supply this abundant resource to remote small communities is becoming a reality. This project will consider existing technological methods of loading, transporting, and unloading methods for natural gas and determine the feasibility of supplying the product to the remote communities ofGranisle, Moricetown, and Hazelton in North West British Columbia as a competitive alternative to propane and oil as a source of home heating. Without a significant demand for energy and considering the cost of infrastructure and operations the option of supplying natural gas to a remote community is not viable. However, with the addition of a large industrial customer such as a mining operation the demand for the resource increases significantly thereby creating a viable project. Contents Abstract .................. .......................................................................................................................... i List of Tables ........................................... .. ............................................................................. ....... iv List of Figures ... ......................... .. ...................................................................... ... ................... ....... v Glossary .... ........................ .................................... ................................ ................................ ... ..... vi Acknowledgements .......................................... ... .... ................................................. .................... viii Chapter 1 .... .................................................................... ... .................... ...... ... .. ..... .......................... 1 Introduction ..................................... ............. ..... ... ........... ..................... .... .. .. .. ... .. ................. ... .... 1 Literature Review .......................................................... .................................... .......................... 2 Methodology ... .. ................. ................. .. ............................................... .. ..................................... 6 About Propane .... ............................... ...... ........................ .............................. ... ..... .. ................... 7 Existing Propane System Overview ... ............................................... .... ................. .... .. ............... 8 Propane Delivery and Storage .................................. ........ .......................................................... 9 Chapter 2 .......................... ................................... .... ... ... ..... ................................... ........................ 10 About Natural Gas ............. ....................................................................................................... 10 Proposed Natural Gas System Overview ................. .. .. ............... .............................................. 11 System Integrity ......................................................... ....................................... .... ................... 11 System Conversion (Appliance Survey) .................................................... .... ... ......... .. ............. 12 System Conversion (Meter sets) ..................... .... ............................ ................. ................... ...... 13 Distribution Conversion .. .......................................................................................................... 14 About Compressed Natural Gas ............... ..................................................... ..... ......... .. ............ 14 Mother Station .......... .. ................................. ... ........ .. ............................................. .. ................. 15 Compressed Natural Gas Transportation ............... .. ............ .. .. ... .. .......................... .................. 16 De-Canting Station (Daughter Station) ............................................ ..... .................................... 17 Chapter 3 ......... ........... ............................................. .................. .................................................... 19 Communities of Granisle, Moricetown, and Hazelton ............................................................. 19 Energy Sources in the communities .......................................................................................... 20 Environmental Considerations - Air ..... ......................................... ................ ... ...................... .. 21 Environmental Considerations- Water ................ ..................................................................... 24 Environmental Considerations - Land ................... ................................................................... 24 11 Potential Natural Gas Users .. ............................................................................ ............... .. ....... 25 Baseline Operation Assumptions ........... ............ ....................................... ..................... ........... 27 Mother and Daughter Stations Specifications and Cost .................... ....................................... 30 Transportation Specifications & Cost.. ........................ .. .... .. ........................ ............................. 31 New Distribution System (Moricetown & Hazelton's) Specifications & Cost.. ...................... 31 Chapter 4 ............... ..... .. ....... .... ...................................... .... .. .......................................................... 3 5 Project Capital Cost ..................................................................... .. .............. .. ... ........... ............. 35 Operations and Maintenance Cost .................................................................... .. .. .... .............. .. 35 Trucking Cost .............................. ............................................................... ... .... ........................ 36 Capital Cost Recovery .... .................................... ... ........................... ........................................ 37 Impact on project feasibility with addition of a large industrial customer .. ............................. 38 Chapter 5 .......................... .................. ................ ................ .................................... ... ......... .. .... .... 41 Summary and Conclusions ...................... ................................................................... .............. 41 Bibliography .... ............... .... .. .... ................... .......................................... ............................. .......... 44 Ill List of Tables Table 1: Population and Residential Buildings Data Gathered From BC Stats, 2006 ................. 19 Table 2: Community Energy Consumption. Data Collected from BC Emissions in perspective, 2009 ................................................................................... ... ............................... .... ..... .. ............... 20 Table 3 -Community Energy Consumption, PNG Internal Source .......................................... .. 21 Table 4 - C02 Emissions Comparison (Quaschning, 2003) ......................................................... 22 Table 5- Average Cost of Propane vs. Average Cost of Natural Gas ($/GJ). PNG Internal Source ... ................ .. ......... .. ..................................... .. .................................................................... 25 Table 6 - Granisle Propane Consumption in GJ's. PNG Internal Source .......................... .. ........ 26 Table 7 - Community Load Profile, PNG Internal Source ........................ .................. .. ............... 27 Table 8- Average Natural Gas Consumption for 2012. PNG Internal Source ............................ 28 Table 9 - Compression and De-canting Package Cost. Data from IMW Industries, Jan 2013 .... 31 Table 10- Distribution System Conversion (Granis1e) Specifications and Cost. PNG Internal Source ..................... .... ............ ..... ... .................. .... .... .... .. .............................................................. 33 Table 11 -New Distribution System (Moricetown & Hazelton) Specifications and Cost. PNG Internal Source .. .....
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