The community of Inuvik opened an LNG facility last month offsetting the current diesel-fuel electricity requirement for the Northwest Territories Power Corp. (NTPC).
Michael Miltenberger, minister responsible for the Power Corp.stated “It will be a more affordable, cleaner source of energy than having to go back to using very expensive diesel”.
As of November 2013, the Town’s gas generators were running on liquified natural gas (LNG). LNG is a safe, clean fuel that costs about 10 to 15 percent less than diesel, and reduces greenhouse gas emissions by about 25 percent. LNG, if spilled, simply evaporates and leaves no residue.
Electricity won’t have a storage problem because the utility will rely on just-in-time LNG deliveries, plus its diesel generators. The delivered LNG tank is the de facto storage vessel. The estimated delivery will be one a week and a 50-50 gas-diesel fuel mix by year-end 2013. Eventually the fuel flow will be 70 to 80 percent gas. Inuvik has ample diesel storage, he said, about a year’s worth.
Lack of costly storage tanks is one reason the local heating utility hasn’t snuggled up to LNG for warming homes and offices. The NT Energy study reckoned $25 million for construction plus $200,000 a year for operation and maintenance of LNG storage to serve both power and heating utilities. The business case still has to be proven.
For LNG to be used for heating as well as electricity, the business case for LNG storage needs to the proven. For now Inuvik will see how LNG pans out and whether the savings are realized. This is very much a test case for further LNG inroads in the north.