Saint John, New Brunswick, Canada
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National Energy Board Panel Session – Tuesday, August 9th, 2016, 1:00 – 4:30 p.m. Location: Saint John, New Brunswick, Canada Energy East Pipeline Ltd. & TransCanada PipeLines Limited Energy East Project and Asset Transfer, and Eastern Mainline Project File OF-Fac-Oil-E266-2014-01 02 Hearing Order OH-002-2016 Mr. A. David Seely Mr. Michael D. Blackier Legal/Control & Resources Manager Legal Counsel Canaport LNG Limited Partnership Canaport LNG Limited Partnership 2530 Red Head Road, 2530 Red Head Road, Saint John, New Brunswick, Saint John, New Brunswick, Canada, E2L 3T5 Canada, E2L 3T5 [email protected] [email protected] Telephone: +1-506-638-1309 Telephone: +1-506-638-1303 Fax: +1-506-638-1335 Fax: +1-506-638-1335 Mr. Fraser Forsythe Mr. Alan L. Ross Security & Environment Manager Regional Managing Partner Canaport LNG Limited Partnership Borden Ladner Gervais LLP 2530 Red Head Road, Centennial Place, East Tower, Saint John, New Brunswick, 1900, 520 - 3rd Avenue S.W., Canada, E2L 3T5 Calgary, Alberta, Canada, T2P 0R3 [email protected] [email protected] Telephone: +1-506-638-1305 Telephone: +1-403-232-9656 Fax: +1-506-638-1335 Fax: +403-266-1395 Introduction Good afternoon members of the Board, my name is Fraser Forsythe, Security and Environment Manager at Canaport LNG Limited Partnership (“CLNG”) and I appear before you today to present CLNG’s statement and questions regarding the Energy East Project and Asset Transfer, and Eastern Mainline Project (the “Project”) to Energy East Pipeline Ltd. and TransCanada PipeLines Limited (the “Proponents”). CLNG supports the National Energy Board’s (“NEB”) hearing process and reserves its right to make further submissions on any potential NEB recommendations, decisions or conditions respecting the Project. CLNG is a state-of-the-art liquefied natural gas (“LNG”) receiving and regasification terminal — the first and only in Canada. CLNG is located within the existing industrial area on the southeastern limits of the City of Saint John, and Province of New Brunswick, adjacent to the existing Irving Oil Canaport Oil Terminal and is approximately one kilometer from the proposed site for the Canaport Energy East marine terminal as referenced in Appendix 1, attached hereto, labeled “Proposed Jetty Location and LNG Ship Maneuver Channel”. CLNG consists of an approximately 350 meter berthing pier designed to unload LNG vessels with a capacity of up to 266,000 m3 of LNG and to load LNG on to ships with approximately 150,000 m3 capacity. CLNG has three LNG storage tanks of 160,000 m3 capacity each, regasification facilities and associated infrastructure. CLNG has a single customer (Repsol Energy Canada Ltd.) that has contracted for the full amount of off take from the terminal. In 2014 Irving Oil Limited installed a crude oil unloading arm on CLNG’s existing LNG jetty for the loading/unloading of crude oil. CLNG is a partnership between affiliates of Repsol, S.A. of Spain (75%) and Irving Oil (25%) of Canada and has been fully operational since 2009. CLNG currently employs approximately 90 people, including contractors, on a permanent full time basis and continues to Page | 2 draw on the professional services of many companies in the city to support the implementation of operational, environmental and safety programs. CLNG also engages in upgrade projects from time to time such as the recently completed $45 million (USD) Boil-off-Gas Compressor Upgrade Project which included investments of $4.8 million to the benefit of local Saint John businesses and approximately $12 million in direct expenditure on labour and materials from businesses in New Brunswick. CLNG has also invested over $1.5 million into community programs, events and organizations in Saint John and the surrounding areas, over the last five years. CLNG is recognized as critical infrastructure by the Department of Public Safety for the Province of New Brunswick and by Public Safety Canada due to the importance of the security of supply of natural gas for power generation and heating needs in the Canadian Maritime Provinces and the Northeastern United States. CLNG currently operates as an important peak shaving facility that gives its customer the opportunity to sell natural gas during critical peak demand times (primarily in winter months). CLNG serves as a strategic energy asset for the Maritime energy supply chain and is one of the largest LNG storage facilities in the region (with 10 Bcf of natural gas storage capacity). Thus, characterizing CLNG as a “minor importer” underestimates the importance of CLNG to the Province and to the northeastern United States supply chain. While CLNG is generally supportive of the Project it has three areas of concern regarding the construction and operation of the Canaport Energy East marine terminal (“MT”) and the Saint John tank terminal (“TT”) and all related infrastructure. The three areas of concern are: (i) the Proponents’ lack of consultation with CLNG; (ii) marine impacts; and (iii) land impacts. Page | 3 These concerns, along with CLNG’s written submissions, were pre-filed with the NEB, and served on the Proponents, their counsel, and other Intervenors in advance of today’s Panel Session. Canaport LNG Consultation With respect to consultation, we note that the Proponents’ application to the NEB relies heavily on consultation with various stakeholders in communities which are impacted by the Project. However, according to the application, CLNG was not consulted regarding its concerns. It is foreseeable that, being in close proximity with the proposed MT and TT, CLNG would have concerns regarding the impact of the Project on CLNG’s onshore/offshore operations. Either the Proponents could have established a standing committee comprised of key stakeholders in the region, including CLNG, in order to address these concerns, or such committee was established and CLNG was not involved. Accordingly, CLNG is participating in the Project’s NEB hearing. Canaport LNG Marine Impact Concerns With respect to marine impact, CLNG is concerned with potential constraints on the berthing of LNG vessels imposed by the Project. The physical characteristics of LNG and the complexity of the technical requirements for berthing and unloading LNG vessels when compared to crude oil vessels must be considered when evaluating berthing priorities. LNG is a cryogenic liquid stored, handled and transported at minus 162°C that produces “boil-off gas” - the vapours created due to ambient heat input (while maintaining constant pressure in the storage vessel). Further, crude oil vessels calling at the MT will be without cargo as they approach the berth of the MT while LNG vessels will have LNG stored in their tanks (which will be “boiling off”, as noted above). Page | 4 Under its Approval to Operate (“ATO”), issued on September 12, 2014, by the Minister of Environment and Local Government for the Province of New Brunswick, pursuant to paragraph 5(3)(a) of the Air Quality Regulation – Clean Air Act, and paragraph 8(1) of the Water Quality Regulation – Clean Environment Act, CLNG has been permitted to berth a maximum of 120 vessels per year at its terminal. An uninterrupted unloading window (the “Uninterrupted Window”) is necessary to safely commence and complete the LNG vessel berthing, discharge and departure processes. The reason LNG vessels require an Uninterrupted Window is that such vessels are unable to perform a partial unloading due to the risk of “sloshing” (i.e. motion of the LNG inside a partially full tank as a consequence of a vessel’s rolling and pitching in a seaway), which could result in damage to the vessel’s tanks and loss of containment of LNG. Such sloshing could result from an LNG vessel being forced to leave the berth before the planned cargo unloading has been completed. The uninterruptible nature of the unloading window is unique to LNG vessels whereas crude oil vessels have the ability to partially load/unload oil and leave for anchorage virtually at any time. In light of the unique physical characteristics of LNG, the complex procedures to safely unload LNG and the uninterruptible nature of the LNG unloading window compared to the interruptible window for crude oil vessels, LNG vessels calling at CLNG should receive priority of berthing over crude oil vessels calling at the MT. Canaport LNG Land Impact Concerns With respect to land impact, one concern is the uninterrupted vehicular access to and from CLNG’s site and the impacts of increased traffic levels on CLNG’s access roads. It is intended that the TT and MT will be constructed on land which is in close proximity to CLNG. A better Page | 5 understanding of the Proponents’ plan for road usage and laydown areas will assist in determining the level of impact on CLNG’s existing operations as referenced in Appendix 2, attached hereto, labeled “Main Transportation Routes to Proposed Canaport Energy East Marine Terminal”. CLNG assumes the following questions will be answered at the August 9, 2016 Panel Session. In the event such questions cannot be answered at that time, CLNG requests that the Proponents respond to its questions by way of undertaking in accordance with correspondence from Proponents’ counsel dated July 12, 2016 (Hearing Document A78521). Questions for the Proponents: 1) Canaport LNG Consideration Questions Proponents Application 1. i. What steps have the Proponents taken to consult CLNG in order to Vol 1, properly understand the impact that the construction and operation s. 2.13 of the MT and TT may have on CLNG’s pre-existing operations? Vol 6, ii. How and to what extent are third party vessels included in the MT s. 6 Qualitative Risk Assessment? Vol 7, iii. Do the Proponents intend to create a “Standing Committee” for the s. 2, 3.5, 3.6, design, construction, and operation of the MT and TT to ensure 5, 6 affected parties, such as CLNG, are involved and their interests are taken into account (e.g.