Canada’s energy regulator approves northern CNG project

The Commission of the Canada Energy Regulator (CER) said March 7 it had approved the proposed Inuvialuit Energy Security Project (IESP) Energy Centre with 20 conditions.

It is the first compressed natural gas facility approved for construction in the Northwest Territories (NWT)

The project is intended to use natural gas produced from the TUK M-18 well near Tuktoyaktuk, to produce compressed natural gas, propane and synthetic diesel that can be used for power and heating. 

The decision is the last of three CER authorisations needed for the project to proceed. In June 2023, the regulator approved IESP plans for early site works and certain well work-over activities on the TUK M-18 well.

The conditions imposed by the CER relate to the mitigation and monitoring of potential impacts, including permafrost melt and noise and include a condition for a seven-year monitoring programme to account for slower vegetation growth in the North. Other conditions focus on environmental protection, safety, emergency response and operational readiness.

Originally, the C$200-C$300mn IESP was intended to include small-scale natural gas liquefaction capabilities to produce LNG, but those plans were abandoned in favour of more cost-effective gas compression capacity when it was decided local markets could not support the production of LNG.

The IESP’s original application for the Energy Centre projected commissioning in Q4 2024 and first gas in Q1 2025, assuming CER approvals would be forthcoming by June 2023.