ST. JOHN’S, NEWFOUNDLAND AND LABRADOR and SURREY, BRITISH COLUMBIA – Fortis Inc. announced today that Fortis Hawaii Energy Inc. entered into an agreement with Hawaiian Electric Company, Inc., to export LNG to Hawaii to be used for local power generation.
Twenty-year agreement would see Hawaiian Electric Companies Inc. import 800,000 metric tons of liquefied natural gas annually from the Tilbury liquefied natural gas facility in Delta, British Columbia
ST. JOHN’S, NEWFOUNDLAND AND LABRADOR and SURREY, BRITISH COLUMBIA – Fortis Inc. (“Fortis”) (TSX:FTS) announced today that Fortis Hawaii Energy Inc. (“Fortis Hawaii”), an indirect wholly-owned subsidiary, entered into an agreement with Hawaiian Electric Company, Inc. (“Hawaiian Electric”), to export liquefied natural gas (“LNG”) to Hawaii to be used for local power generation.
The 20-year agreement sets the terms for the supply of LNG to Hawaii. Under the agreement, Fortis Hawaii would deliver 800,000 metric tons of LNG annually to Hawaiian Electric from FortisBC’s Tilbury LNG facility in Delta, British Columbia, starting in 2021. The agreement outlines the conditions to be met and the necessary approvals to be received to allow the project to proceed, including government and regulatory approvals in both British Columbia and Hawaii and the approval of the merger of Hawaiian Electric and NextEra Energy Resources.
“FortisBC is uniquely positioned to capitalize on the strong market demand for clean-burning B.C. natural gas as a bridge fuel in the transition to renewable energy production,” said Barry Perry, President and CEO of Fortis Inc. “Our small-scale Tilbury facility fits well with the needs of customers like Hawaiian Electric and shipping from Canada’s West Coast costs less than from other locations, including the U.S.”
Hawaii has an ambitious goal of 100 percent renewables for electricity generation by 2045. In a filing with the Hawaii Public Utilities Commission, Hawaiian Electric said importing natural gas from British Columbia will decrease its present reliance on imported oil for almost 80 percent of its electricity generation, reduce greenhouse gas emissions significantly and provide a reliable, cleaner, lower-cost fuel for its transition to a 100 percent renewable energy future.
“Liquefied natural gas has the potential to play a key role in helping to lower global greenhouse gas emissions associated with power generation,” said Michael Mulcahy, President and CEO of FortisBC. “Here in B.C., liquefied natural gas has already demonstrated clear benefits both as a clean-burning transportation fuel and a cost-effective way for remote communities to reduce emissions associated with burning oil or diesel for power generation.
“This agreement demonstrates the benefits of exporting liquefied natural gas by allowing us to bring environmental and cost-savings benefits to communities abroad,” said Mr. Mulcahy.
To support the agreement, a further expansion at FortisBC’s Tilbury LNG facility would be required. The expansion would include additional liquefaction equipment and a new 46,000 m3 (1.1 million gigajoules) storage tank, as well as a new power line so that FortisBC can continue to power its operations with electricity. If all conditions are met and government, regulatory and internal approvals are received, expansion of the Tilbury LNG facility would commence in 2018.
“We have an opportunity to help the world move away from dirtier fuels and to create a path for Hawaii to shift towards a cleaner future with B.C. LNG,” said B.C. Premier Christy Clark. “In the process, we’re also creating jobs for British Columbians and strengthening our economy. Congratulations to FortisBC and Hawaiian Electric for getting to yes on an agreement to export B.C. LNG.”
FortisBC’s natural gas utility would continue to own and operate the existing equipment and facility at Tilbury that serves domestic customers. This includes the peak-shaving facility FortisBC has safely operated since 1971 and the expansion project currently under construction. Any new assets built to support Hawaiian Electric and future international customers would be owned by a separate Fortis company.