It will be a long haul before Discovery LNG starts shipping liquid natural gas from the former Elk Falls Mill site.
But Quicksilver Resources is serious about seeing the project happen, says senior vice president and chief operating officer David Rushford.
“Obviously, we’re very serious,” Rushford said, during an interview at a community meet and greet held at the Elk Falls Mill site Monday.
Interest in the project is high amongst Campbell Riverites. People were asked to RSVP to the advertised informational event and 400 took the time to indicate they were coming. For every person that RSVPs, there’s an exponential number that plan to drop by so Quicksilver staff were prepared for up to 800 to show up.
The interest and support shown by Campbell River has impressed Quicksilver officials.
“When you try to develop these projects, one of the things you look for is a supportive community,” Rushford said. “The community is totally behind us.”
Rushford said the Elk Falls site, which it bought from Catalyst Paper in May for $8.6 million is a perfect location. It has a deepwater port, a brownfield site (mothballed industrial location) that is “beautiful” for LNG, there are multiple ways to get the gas here and there is an educated local workforce that is a legacy of the former pulp and paper operation.
“You are not going to see a better site in B.C. to do LNG than Campbell River,” Rushfrod said.
The company has leased approximately 129,000 acres in northeastern B.C. in the Horn River Basin, where Horn River Shale formations are believed to contain large quantities of recoverable deep shale natural gas. The company also holds 410,000 acres in Alberta.
The challenge for the company is to find markets for its Horn River property, the most likely target being Asia – Japan, South Korea and China. With its Elk Falls purchase, Quicksilver has the means to ship LNG to Asian markets.
A previously-identified hurdle to the project is the size of the existing gas pipeline that supplied the former pulp mill. That 10-inch line is not big enough, Rushford said. A 36-inch line will be needed. A route for a new pipeline has been identified and negotiations are ongoing with landholders.
Rushford said the company is “very confident” they can get a pipeline to the project. He pointed out that the plant developers don’t usually build or own the supplying pipeline, that would be done by any number of possible pipeline builders.
Before a pipeline is built and hooked up, the company has two major processes to go through – a regulatory path and a financial certainty path.
“A development of this size is much bigger than we can do on our own,” Rushford said.
Quicksilver is searching for an investment partner, likely a company from Asia.
With regards to regulatory approvals, both the federal and provincial governments have their environmental assessment acts to be satisfied.
Quicksilver intends to begin the regulatory process later this year. Pending regulatory approvals and permits, construction for the first phase of the potential project is expected to take approximately four years, with the project anticipated to be operational by 2019.