LNG agreement quashed

Photo: FortisBC

B.C.’s LNG export dream has hit a bump in the road after a major merger was quashed.

In May, FortisBC announced it had signed an agreement to provide liquified natural gas to the Hawaiian Islands. It was one of the first agreements to export B.C. LNG.

The agreement hinged on regulatory approval.

Now, the Hawaii Public Utilities Commission has decided not to allow the merger between Hawaiian Electric Companies and NextEra Energy, citing concerns about whether the merger is in the public interest.

The decision effectively kills the LNG export agreement with FortisBC. 

“Following the termination of the proposed merger with NextEra Energy, the Hawaiian Electric Companies today withdrew their applications for approval of a liquefied natural gas contract with Fortis,” said Hawaiian Electric in a statement.

In a statement, FortisBC said it’s been notified of the decision. 

"The company is in discussions with a number of other potential export customers," it said in a statement. "The (Tilbury LNG) facility is currently undergoing a $400-million expansion to serve the domestic transportation and remote communities markets, which is expected to be commissioned by early next year. It is also located along the Fraser River and relatively close to international shipping lanes."

The agreement would have lasted 20 years, and seen 800,000 metric tons of LNG shipped from FortisBC's LNG facility in Delta to Hawaii, starting in 2021.

The LNG was expected to come from the company’s Tilbury facility, which FortisBC said “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."