ENERGY AND CANADIAN FIRST NATIONS LNG - AN INTRODUCTION BC First Nations Energy and Mining Council

2020

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1 World Energy consumption Billion Tons of Oil Equivalent

Source: bp.com 2 World Energy Consumption

World energy demand is increasing.

Global economic growth, led primarily by China and India, is driving increasing prosperity in developing economies.

Global growth is partly supported by population growth with world population increasing by around 1.7 billion to reach nearly 9.2 billion people in 2040, and the emergence of large and increasing middle classes. With an increasing middle class comes a rising standard of living. It’s this standard that drives energy demand.

In the next 20 years, demand for all forms of energy will rise, led by China and India.

2 Canada and Energy

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Canada and Energy Canada is sell positioned to provide multiple forms of energy to growing world economies. Canada is rich in oil, natural gas, coal, hydroelectricity, and nuclear energy options.

Wind, solar, geothermal, biomass, biofuels: Increasingly, these forms of energy are increasingly part of Canada’s energy mix with export opportunities.

Oil: Canada has the third-largest oil reserves in the world. Of the 170 billion barrels of Canadian oil that can be recovered economically with today’s technology, 165 billion barrels are located in the oil sands. The International Energy Agency (IEA) expects that Canada will be third in oil production growth until 2040, after Brazil and Iraq.

Natural Gas: At current rates of consumption, Canada has enough natural gas to meet the country’s needs for 300 years, with enough remaining for export. The export of natural gas using proposed liquefied natural gas (LNG) facilities on Canada’s West Coast would enable Canada to ship its abundant energy resources to markets in Asia.

Coal: Coal is Canada’s most abundant fossil fuel, with 6.6 billion tonnes of recoverable reserves.

Hydro: Hydro is the largest source of electricity generation in Canada, providing more than 60% of Canada’s total electricity with an installed capacity of about 85,000 MW. This makes Canada the second largest generator of hydroelectricity in the world, after China. 3 4 For the most part, nearly ALL of Canada’s oil and natural gas exports go to the United States. And often, the USA receives Canadian oil and natural gas at a discount due to being the sole customer.

Diversifying markets for Canada’s oil and natural gas production is vital to ensure Canada receives full value for its natural resources. This supports Canadian jobs, government revenues and contributions to Canada’s economy.

The largest non-USA energy market is Asia. With Asia’s growing population and rising living standards, Canadian energy would find ready customers in countries like China, Japan, India and southeast Asia.

This issue is how to get Canadian energy to Asia.

4 5

First Nations in BC have a potential huge role in Canada’s energy exports.

Any energy exports to Asia MUST pass through the traditional and unceded territories of First Nations.

This is why there has been high levels of consultation and negotiation with First Nations in all areas of energy projects from production, to pipelines, to transmission lines, to LNG facilities and to marine transport.

5 Energy Literacy BY FIRST NATIONS for First Nations

6 Energy Literacy by First Nations for First Nations

For many First Nations, there is a need for unbiased, technical information about proposed energy projects.

The First Nations Energy Mining Council (FNEMC), as a creation of the BC First Nations Leadership Council, has been mandated to assist First Nations with energy information to assist impacted Nations make informed decisions.

FNEMC does NOT advocate for specific energy projects. Rather, by providing Nations with requested energy literacy information, communities may be better able to engage with project proponents and reach outcomes that are in the Nations’ best interests.

6 ENERGY SOURCES

Natural Oil Coal Renewable Hydro Nuclear ^ Gas

Crude & LNG Geothermal Condensates

NG Liquids Biomass

Other * Wind

Solar

* Other oil liquids includes biofuels, Gas-to-Liquid (GTL) Coal-to-Liquid (CTL) and refinery gains ^ None in BC 7

Energy Information by First Nations for First Nations

Canada has many different energy sources, each of which could impact First Nations.

In some cases, First Nations may decline to participate in an energy project for a variety of reasons. Other First Nations may decide to participate if the projects offer their communities a net-benefit.

To achieve a net-benefit, Nations need to well-versed on relevant sector information.

In time, BC First Nations Energy and Mining Council will offer First Nations a range of technical information modules in all of Canada’s key energy areas.

7 ENERGY SOURCES

Natural Oil Coal Renewable Hydro Nuclear ^ Gas

Crude & LNG Geothermal Condensates

NG Liquids Biomass

Other * Wind

Solar

* Other oil liquids includes biofuels, Gas-to-Liquid (GTL) Coal-to-Liquid (CTL) and refinery gains ^ None in BC 8

Energy Information by First Nations for First Nations

Canada has many different energy sources, each of which could impact First Nations.

In some cases, First Nations may decline to participate in an energy project for a variety of reasons. Other First Nations may decide to participate if the projects offer their communities a net-benefit.

To achieve a net-benefit, Nations need to well-versed on relevant sector information.

In time, BC First Nations Energy and Mining Council will offer First Nations a range of technical information modules in all of Canada’s key energy areas.

8 LNG - AN INTRODUCTION

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IMAGE: cherezoff/Shutterstock LNG - An Introduction

IMAGE: cherezoff/Shutterstock

9 World Energy Demand

10 World Energy Demand

World energy demand is increasing.

Global economic growth, led primarily by China and India, is driving increasing prosperity in developing economies.

Global growth is partly supported by population growth with world population increasing by around 1.7 billion to reach nearly 9.2 billion people in 2040, and the emergence of large and increasing middle classes. With an increasing middle class comes a rising standard of living. It’s this standard of living that drives energy demand.

In the next 20 years, demand for all forms of energy will rise, led by China and India.

10 Source: CAPP

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Canada and Natural Gas:

Canada has vast amounts of natural gas, enough to service domestic needs and to export to overseas markets.

Canada’s natural gas comes mainly from the Western Canada Sedimentary Basin (WCSB) in British Columbia, Alberta, and Saskatchewan.

Source: CAPP

11 Asia Market Potential for LNG

Source: BC Government

SOURCE: BC Government 12 Asia Market Potential for LNG The world’s largest LNG market is in Asia. Nearly 3/4 of all world LNG is sold is in Asia. BC one of Asia’s closest potential suppliers of natural gas. At the moment, BC supplies ZERO natural gas to Asia. To serve the Asia market, there are currently four active LNG projects in BC.

12 BC LNG projects

LNG CANADA 1 26 MTPA / $25-40 BILLION

KITIMAT LNG 2 10 MTPA / $15 BILLION 1 2 3 WOODFIBER LNG 2.1 MBTA / $1.6 BILLION

TILBURY LNG 4 3 3.5 MTPA / $3 BILLION 4

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BC LNG Projects

There are currently four active LNG proposals in BC. In 2015, there were 18 LNG plants proposed for the province.

LNG CANADA 26 MTPA (million tonnes per annum) / $25-40 BILLION

KITIMAT LNG 10 MTPA / $15 BILLION

WOODFIBER LNG 2.1 MTPA / $1.6 BILLION

TILBURY LNG 3.5 MTPA / $3 BILLION

13 Planned BC LNG projects

LNG CANADA 1 26 MTPA / $25-40 BILLION

KITIMAT LNG 2 10 MTPA / $15 BILLION $58 billion1 2 3 WOODFIBER LNG 2.1 MBTA / $1.6 BILLION

4 TILBURY LNG 3.5 MTPA / $3 BILLION 3 4

14 Planned BC LNG Projects

Total anticipated cost for these four plants: $58 billion.

For comparison, what can else could you buy for $58 billion?

14 Trans-CANADa RAILWAY $0.6 Billion(2020 dollars)

97 times

CreativeNature.nl/Shutterstock

https://en.wikipedia.org/wiki/Canadian_Pacific_2816#/media/File:Canadian_Pacific_2816.jpg 15

Amy Johansson/Shutterstock Trans-Canada Railway

The Canadian Pacific Railway was to cost $25 million in 1881 or $634 million in 2020 equivalent dollars.

If once could build the same railway today using today’s money, you could build 97 Trans-Canada railways. https://www.in2013dollars.com/

IMAGE: https://en.wikipedia.org/wiki/Canadian_Pacific_2816#/media/File:Canadian_Pacific_2816.jpg

15 2010 Olympic games $8.3 Billion(2020 dollars)

7 timeshttps://en.wikipedia.org/wiki/List_of_Olympic_women%27s_ice_hockey_players_for_Canada#/media/File:Canada2010WinterOlympicswomengold.jpg

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https://en.wikipedia.org/wiki/List_of_Olympic_women%27s_ice_hockey_players_for_Canada#/media/File:Canada2010WinterOlympicswomengold.jpgAmy Johansson/Shutterstock 2010 Olympic Games

A more modern example would be the 2010 Vancouver Olympic Winter Games. In 2010, the games cost just over $7 billion, or $8.3 billion in 2020 equivalent funds.

In today’s terms, you could host seven Olympic Games for the cost of four LNG plants in BC.

IMAGE: https://en.wikipedia.org/wiki/List_of_Olympic_women%27s_ice_hockey_players_for_Canada#/media/File:Canada2010WinterOlympicswomengold.jpg

16 Why LNG? Why now?

nikkytok/Shutterstock 17

Liquified Natural Gas, (LNG) is not a new fuel. It already trades in vast quantities around the world. It has traded for over 40 years and is shipped around the globe.

In order to understand why it is proposed for BC, we need to examine why the LNG proposals are happening now.

And, what is driving the $58 billion proposals.

The two key reasons are world population growth and increasing individual prosperity.

Image: nikkytok/Shutterstock

17 World Supply & Demand 1 Liquefaction 5

Value Chain 2 Marine Transport 6

Exploration & Production 3 Storage & Regasification 7

Pipeline 4 Distribution 8

18 World Supply and Demand

First Nations are now in the middle of energy ‘super highway’ that connects the energy supplies in Alberta and the BC northeast to energy buyers in Asia and beyond.

To understand why this is happening, we need to look beyond our territories to the investors and buyers who are driving all of this investment in our lands.

The world energy market is vast and global. What is happening here is directly related to what is happening overseas.

Today, we start with a quick overview of the world energy market, and see how that effects us here in BC.

18 Growing Population 7.8 billion (2020) 9.6 billion (2050)

Source: United Nations alexmillos/shutterstock 19 Growing Population

The current world population is about 7.8 billion people. While this number has been growing in recent years, it’s set to grow even more in the next 35 years.

The United Nations estimates that the world population will grow to nearly 10 billion people by the year 2050.

Some higher estimates are even higher numbers, perhaps as high at 14 billion, nearly double the current population.

IMAGE: alexmillos/Shutterstock

19 Growing Population developed (billions) emerging

* Source: BP Statistical Review of World Energy 2012 20

Growing Population

Most of this population growth is happening overseas, mainly in the third world and the developing world.

On this chart, Canada, along with United States, Japan and Europe shown in dark green, have stable or declining populations. If it were not for immigration and high First Nations birthrates, Canada’s population would be dropping.

But in the rest of the world, the population is increasing.

There will be billions and billions of new people in the next 35 years.

20 Getting Richer

Tetiana Yurchenko/Shutterstock 21 Getting Richer

At the same time as the world population is climbing, it is getting richer.

The developing world’s wealth per person is increasing.

IMAGE: Tetiana Yurchenko/Shutterstock

21 World Wealth developed emerging ($ trillions)

* Source: BP Statistical Review of World Energy 2012 22

World Wealth

Already, the developing world’s wealth has surpassed the developed world. Combined, the all the emerging countries combined now have more money and wealth than developed countries like Canada or the United States.

And like people anywhere, what do people do when they come into money and wealth?

22 Igor Klimov/Shutterstock

Black Jack/Shutterstock 23 They go shopping! They buy ‘stuff’, namely the same stuff that we in Canada have enjoyed for years.

People overseas are buying their first cars, computers and home appliances.

And to run this stuff, you need one thing, and lots of it…

IMAGES: Black Jack/Shutterstock Igor Klimov/Shutterstock Tata

23 BC First Nations & World Energy Markets

Mark Podlasly © 2013 [email protected] 24 Lisa S./Shutterstock

You need energy. Namely electricity.

At the same time as overseas populations are buying new computers, TVs, washing machines, they are looking for energy sources to power their new purchases.

IMAGE: Lisa S./Shutterstock

24 World Energy Demand

TOE = Tones of Oil Equivalent * Source: BP Statistical Review of World Energy 2012 25

World Energy Demand

These charts shows how energy demand is increasing.

The first chart shows the growth in energy demand. Notice that the light green is the developing world. It is increasing. Canada and the USA are in the dark green. Our overall everyday needs are stable and will not increase that much. Almost all of the new world energy demand is overseas.

The second chart shows how this new energy will be used. It will be used for power generation. Lots of new appliances needs lots of new electricity.

The third chart shows the source of this new energy.

25 World Energy Demand + 300%

* Source: BP Statistical Review of World Energy 2012 26

World Energy Demand

A growing world population + increasing wealth = more appliance purchases = increased energy demand.

By the year 2050, the world will need more than 3 times as much energy just to keep up with demand.

So, where does energy come from?

26 World Energy Demand

vasabii/Shutterstock

Geo-grafika/Shutterstock

nikkytok/Shutterstock

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World Energy Demand

The vast majority of world energy comes from three main sources: coal, oil or natural gas.

In BC, most of our energy comes from water or hydroelectric dams, but water is scarce in most of the world. So to generate electricity, most countries burn one of the above three fossil fuels to make steam to turn turbines to make electricity.

But, coal and oil are carbon intense fuels. In many developing world cities, the air quality is poor due to burning large amounts of coal or oil to generate power. Plus, they produce large amounts of carbon which contributes to climate change.

The cleanest fossil fuel is natural gas. This is why countries are investing so much money to get access to cleaner burning natural gas. It’s also why these countries are so interested in BC’s natural gas.

IMAGE: Geo-grafika/Shutterstock vasabii/Shutterstock nikkytok/Shutterstock

27 2018 LNG Consumption: 317 MTPA

525 ships

www.igu.org › default › files › IGU Annual Report 2019_23 loresfinal 28

2018 LNG Consumption: 317 MTPA

In order to move natural gas to markets, you either build a land pipeline to move the gas from producers to buyers, or if the gas needs to cross an ocean you need to move the gas by ship.

But putting gas in a ship is difficult and expensive. In order to reduce costs, you need to condense the gas into something more manageable. You need to ‘shrink’ the gas and to do this, you cool the gas until it becomes a liquid (natural gas -> liquid natural gas). Then, you put it on a ship.

In 2018 were 525 ships moving nearly 317 million tons of LNG to markets. If you look at the above chart, you’ll see that many LNG is going to Asia.

Since many Asian countries do not have enough energy resources in their own countries, they import nearly all their energy supplies.

~70% of all the world’s LNG goes to Asia.

Source: www.igu.org › default › files › IGU Annual Report 2019_23 loresfinal

28 ASIA: biggest LNG buyer

JAPAN 26% ~ 70% to Asia Taiwan CHINA 5% INDIA 17% S. KOREA 7% 14%

Source: IGU 29

Asia: Biggest LNG Buyer

In 2018, over 70% of the world’s LNG supplies went to five countries in Asia - Japan, China, South Korea, India and Taiwan.

Japan is the world’s largest importer of LNG.

29 LNG Competitors

Russia

USA Nigeria Qatar

Brunei Equa. Malaysia Guinea Indonesia Australia

30

LNG Competitors

While Canadian natural gas producers would like to sell LNG to Asia, it is already a highly competitive market. Many countries sell LNG to Asia under long-term contracts.

30 Brunei LNG Competitors 2% 2018 = 317 MTA PNG 2% Algeria UAE 3% Oman 2% 3% Trinidad Qatar 4% 26% Indonesia 5% Russia 6% Nigeria 7% USA Australia 23% 7% Malaysia

Source: IGU 8% 31 LNG Competitors

This chart shows who is currently providing natural gas (as LNG) to the world markets.

Qatar, a tiny kingdom in the Middle East, currently supplies most of the world’s LNG. But things are changing quickly. Australia, now number two in LNG production, will be number one within 10 years.

All of these countries realize the benefits of providing LNG to growing energy markets.

31 LNG Pricing - No World Price $1.7 $9.9 N. America Asia

per: USD/MMBtu Prices as of March 2020

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LNG Pricing - No World Price

There is no ‘one world price’ for LNG. Each regional market sets its own price. This is because each market has different natural gas and LNG availability.

LNG in North America is currently valued at US$1.70 per MMBTU (million British Thermal Units) while in Asia, the same amount of LNG is worth US$9.90 nearly 5 times as much.

This shows the incentive for LNG producers to get their product to Asia.

32 World Supply & Demand 1 Liquefaction 5

Value Chain 2 Marine Transport 6

Exploration & Production 3 Storage & Regasification 7

Pipeline 4 Distribution 8

33 Value Chain

33 LNG VAlue chain

EXPLoration & Pipeline Liquefaction Storage Marine Transport Storage RE-gas Distribution Processing

An integrated energy system

An excellent LNG Overview Video https://www.youtube.com/watch?v=QgtSoEJD9HE

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LNG Value Chain

In order to understand globe spanning LNG energy systems and where First Nations can benefit from the multi-billion investments, it’s important to understand how LNG is made and transported.

An LNG system is more than just an ocean terminal. An LNG system is called a supply chain or a value chain and includes parts from exploration, pipeline, liquifaction, storage, marine transport, storage, re-gasification and distribution.

All of these parts are interconnected and together, they determine the LNG PRICE, COMPETITIVENESS and AVAILABILITY to end users.

A complete LNG value chain is HUGELY expensive

An excellent video showing how LNG is made: https://www.youtube.com/watch?v=QgtSoEJD9HE

34 LNG VAlue chain

EXPLoration & Pipeline Liquefaction Storage Marine Transport Storage RE-gas Distribution Production

Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

FIRST NATION FIRST NATION FIRST NATION

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LNG Value Chain

First Nations at different parts of the LNG value chain have different opportunities to benefit from the individual parts of the energy system.

First Nations at the start of the LNG value chain at the natural gas exploration and production segment will have different involvement opportunities than Nations along the pipeline or those at the ocean-side liquefaction and marine transport facilities.

Some First Nations have combined their interests to capture a broader range of opportunities along the value chain.

35 World Supply & Demand 1 Liquefaction 5

Value Chain 2 Marine Transport 6

Exploration & Production 3 Storage & Regasification 7

Pipeline 4 Distribution 8

36 Exploration and Production

36 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

Methane: coloUrless, odourless, combustable gas Created by decomposing plants and animals Plants die, fall to seafloor, covered by sediment Millions of years, high pressure and Carbon Michelangelus/Shutterstock heat, creates oil and natural gas Hydrogen

37

Exploration & Production

Natural gas is mostly methane, a colourless, odourless, combustable gas that is created by decomposing plants and animals that lived millions of years ago in ancient seas that once covered the interior of Canada and the USA.

As the plants and animals died in the ancient seas, they fell to the seafloor and were covered by sediment.

Over millions of years, this sediment accumulated and under high pressure and heat, the plants and animal eventually turned into oil and natural gas.

IMAGE: Michelangelus/Shutterstock

37 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

Conventional Gas

‘cap’ rock catches rising natural gas like an umbrella

a hole drilled through the cap rock

cap rock can be thousands of feet deep in the earth

IMAGE: U.S. Energy Information Association 38

Exploration & Production

Natural gas can be either ‘conventional’ or ‘unconventional’.

Conventional gas - which until fairly recently - was how most of Canada’s natural gas was produced. Natural gas rises in the earth until it reaches a ‘cap’ rock that catches the gas like an umbrella.

A hole is drilled downward through the cap rock and the natural gas is removed. A cap rock can be thousands of feet deep in the earth.

IMAGE: U.S. Energy Information Association

38 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

Unconventional Natural Gas

Tight Natural Gas: hard rock (Shale), fracking, Deep Natural Gas: +15,000 feet

Image: John T Takai/Shutterstock 39

Exploration & Production

Unconventional natural gas is found in hard rock, also known as shale rock. In order to capture this gas, a pipe is drilled down and sideways into the hard rock which is then ‘cracked’ in a process know as hydraulic fracturing or ‘fracking’.

Deep drilling, beyond 15,000 feet, is also considered to be unconventional natural gas.

Image: John T Takai/Shutterstock

39 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

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Exploration & Production

This is a diagram showing how unconventional natural gas is collected.

A pipe is drilled down to the shale, and then extended sideways into the rock formation. The shale is ‘cracked’ and the gas that was trapped in the shale is extracted.

IMAGE: Laurie Barr/Shutterstock

40 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

huyangshu/Shutterstock 41

Exploration & Production

The natural gas is then piped from the well to a processing plant to be cleaned before it is put into a pipeline for transport.

IMAGE: huyangshu/Shutterstock

41 World Supply & Demand 1 Liquefaction 5

Value Chain 2 Marine Transport 6

Exploration & Production 3 Storage & Regasification 7

Pipeline 4 Distribution 8

42 Pipeline

42 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

43 Pipeline

Once the natural gas is cleaned and ready for market, it is sent through large pipelines to its final destination. The main natural gas pipelines that cross BC are generally 48-inches in diameter.

Pipelines are buried for most of their route.

43 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

GTS Productions/Shutterstock 44

Pipeline

In order to keep the natural gas flowing through the pipeline there are ‘pusher’ stations built into the pipe.

Known as compressor stations, these are located along the pipeline route every 65 to 160 km. The compressors are similar to jet engines (with up to 36,000 horsepower) and move natural gas through the pipeline at around 40 km an hour.

IMAGE: GTS Productions/Shutterstock

44 World Supply & Demand 1 Liquefaction 5

Value Chain 2 Marine Transport 6

Exploration & Production 3 Storage & Regasification 7

Pipelines 4 Distribution 8

45 Liquifaction

45 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

Gas is received via pipeline

Chilled -162C to liquid

1/600

46

Liquifaction

At the coast, the natural gas goes into a LNG liquefaction plant which is essentially a giant refrigeration unit that cools the gas to -162 degrees celsius.

At this point, the natural gas will turn to liquid. In LNG form, the gas shrinks to 1/600 in volume. This allows the gas to be pumped into a storage tank, then onto a ship to be transported to overseas markets.

IMAGE: vichie81/Shutterstock

46 World Supply & Demand 1 Liquefaction 5

Value Chain 2 Marine Transport 6

Exploration & Production 3 Storage & Regasification 7

Pipeline 4 Distribution 8

47 Marine Transport

47 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production Liquefaction transport Regasification

LNG Vessels Special ships: floating thermos bottles to keep gas cold and liquid 525 special ships worldwide 53 SHIPS ADDED in 2018

Tosaka / CC BY-SA (http://creativecommons.org/licenses/by-sa/3.0/) 48 Marine Transport At the coast, special ships known as LNG carriers will receive the LNG for transport to overseas customers. The ships are like floating thermos bottles that keep the LNG cold and in liquid form.

In 2018 there were 535 LNG carriers available to carry LNG to final customers. The number of LNG carriers is increasing. In 2018 53 new LNG carriers entered service.

IMAGE: Tosaka / CC BY-SA (http://creativecommons.org/licenses/by-sa/3.0/)

48 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

LNG carriers Ships run on LNG that ‘boils off’ or warms back to gas 0.1-0.25% of LNG turns back to gas each day Depends on roughness of trip plus ship insulation 20 day trip = 2-6% of LNG cargo ‘boils off’

Oleksandr Kalinichenko/Shutterstock

49 Marine Transport

LNG carriers use the part of their LNG cargo that ‘boils off’ or warms back to gas. About 0.1-0.25% of LNG turns back to gas each day that the ship is at sea. The exact amount depends on the roughness of the ocean trip plus the quality of the ship’s LNG tank insulation.

On a 20 day trip about 2-6% of a LNG cargo ‘boils off’ or warms back to gas form.

LNG carriers are very safe. If an LNG carrier broke open, the LNG would warm and evaporate into the air. It would not pollute the water. Also, LNG cannot burn when in liquid form.

Image: Oleksandr Kalinichenko/Shutterstock

49 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production Liquefaction transport Regasification

LNG carrier $200-$250 million to build Carry 135,000 cu. m gas, 2.4 Bcf Ocean shipping cheaper than pipelines for distances > 3,550 km

50

Marine Transport

LNG carriers are specialized ships that only carry LNG. They cannot be used for any other cargo.

LNG carriers cost approximately $200-$250 million each to build. One ship can carry about 135,000 cu. m gas, or 2.4 billion cubic feet.

Shipping LNG via marine shipping is cheaper than pipelines for distances over 3,550 km.

IMAGE: Oleksandr Kalinichenko/Shutterstock

50 World Supply & Demand 1 Liquefaction 5

Value Chain 2 Marine Transport 6

Exploration & Production 3 Storage & Regasification 7

Pipeline 4 Distribution 8

51 Storage and Regasification

51 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

135 LNG Terminals with inbound 824 MTPA capacity (29+ under construction)

Now shipping outbound 317 MTPA

Source: IGU 2018 Review 52

Storage and Regasification

There are now 135 LNG receiving terminals around the world that can accept 824 million of tons per annum (MTPA) of LNG per year. There are also another 29 new LNG receiving terminals under construction.

To put this into perspective, the current volume of LNG being shipped is 317 MTPA.

Source: IGU 2018 Review

IMAGE: Ligados/Shutterstock

52 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

LNG is warmed back to gas and inserted into distribution system

Nadja1/Shutterstock

53

Storage and Regasification

The LNG is taken out of the ship and transferred to a storage tank then to a regasification unit to be warmed and turned back into natural gas. At this point the natural gas can be inserted into the local distribution system and sent to users.

IMAGE: Nadja1/Shutterstock

53 World Supply & Demand 1 Liquefaction 5

Value Chain 2 Marine Transport 6

Exploration & Production 3 Storage & Regasification 7

Pipeline 4 Distribution 8

54 Distribution

54 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

EXPLoration & Pipeline Liquefaction Storage Marine Transport Storage RE-gas Distribution Production

55

Distribution

Once the warmed natural gas is in the distribution network, it can be used by local companies or homes just as we use natural gas here in Canada.

IMAGE: nikkytok/Shutterstock

55 Exploration Marine Storage & Pipeline Liquefaction Distribution & Production transport Regasification

EXPLoration & Pipeline Liquefaction Storage Marine Transport Storage RE-gas Distribution Production

Energy Literacy BY FIRST NATIONS for First Nations

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Energy Literacy for First Nations

This module - LNG: An Introduction - is the first of a series on energy literacy for First Nations by First Nations seeking to be better informed of proposed projects in their traditional territories.

FNEMC as a creation of the BC First Nations Leadership Council, has been mandated to assist First Nations with energy information to assist impacted Nations make informed decisions. FNEMC does NOT advocate for specific energy projects. Rather, by providing Nations with requested energy literacy information, communities may be better able to engage with project proponents and reach outcomes that are in the Nations’ best interests.

Additional information on other energy literacy modules can be found at: http://fnemc.ca/

56 ENERGY AND CANADIAN FIRST NATIONS LNG - AN INTRODUCTION BC First Nation Energy and Mining Council

2020

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