Municipality okays adding
five members to natural gas committee

By Liz Dadson

Kincardine council

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David Matchett (C) of AMEC talks to members of the public at the natural gas open house held in November

Kincardine council has endorsed a motion by councillor Mike Leggett, calling on an expanded committee to deal with the proposed natural gas project.

At the Dec. 18 council meeting, Leggett's motion urged an increase in the number so the business plan can be completed in a reasonable length of time, and that wider input and consideration can be provided by this committee.

The motion proposed adding two more Kincardine council members, and one more council member from Huron-Kinloss and Arran-Elderslie. Currently, the committee includes the mayors of the three partner communities: Larry Kraemer of Kincardine, Mitch Twolan of Huron-Kinloss and Paul Eagleson of Arran-Elderslie.

Leggett also called for a board member from the Penetangore Regional Economic Development Corporation (PREDC) be added to the committee to provide necessary wider input and consideration of all options. And that the committee report to each of the respective councils at least monthly.

PREDC has been working on the natural gas project for the past two years, said Leggett, and should continue as a part of the current committee. And the additional councillors will help get this project moving along, he said.

"I agree 100 per cent," said councillor Kenneth Craig. "Let's pass this and send it to Huron-Kinloss and Arran-Elderslie, but what if they say no?"

Mayor Larry Kraemer said councillor Ron Coristine was on the previous committee with PREDC and could perhaps serve in those two capacities on the new committee.

"The next steps involve a lot of legal work," he said, noting an eight-person board would be somewhat unwieldy.

"If Ron (Coristine) joined from council and PREDC, that would be more efficient," said Kraemer.

"I would leave it to PREDC as to who it wants to send," said Coristine.

Kraemer said an all-councillor committee would be best for the next phase.

"PREDC was a big part of this project for two years and had two members on the original committee," said deputy mayor Anne Eadie. "They have, unfortunately, lost a member who did a lot of leg work on this project."

"We can approve this and then see what our partner communities want to do," said Kraemer.

"Can we vote to re-establish the committee and then see if our partners support it?" asked Eadie.

"It would be best to add PREDC in stage two," said Kraemer.

Council agreed to add four council members and a PREDC board member to the natural gas committee.

Meanwhile, the natural gas proposal has provided more options, as outlined at the community open house in November.

The three participating municipalities have formed a municipal services corporation which will be governed jointly by the three municipalities and will have sole and exclusive mandate to examine viable options, complete project feasibility, and ultimately, develop the best option to bring natural gas to the three communities.

On hand to speak to people at the open houses, held in Kincardine, Arran-Elderslie and Huron-Kinloss, were project consultants David Matchett of AMEC Environment and Infrastructure, and Todd Kerry of EFG Energy Fundamentals.

Matchett noted that besides the $100-million Union Gas proposal, there are two other options for the natural gas project: a Compressed Natural Gas System as an alternative to transmission pipeline, through GreenField Ethanol; and a Compressed Natural Gas System for deliveries to northern markets, through Northern Cross Energy based in Goderich.

Both alternatives substantially lower the capital cost of the project, and offer the lowest cost of service and lowest all-in landed cost of gas. They also offer shorter project timeline and approval risk.


David Matchett (L) of AMEC discusses natural gas project options with Gord Thompson of Kincardine

The next step is to develop a commercially-viable business case that will support bringing natural gas to the communities and address a number of critical aspects, such as:

  • A formal relationship among the three municipalities through a Memorandum of Understanding or some  other form of agreement
  • Market validation and secure market commitments to natural gas
  • Complete detailed and technical analysis of competitive alternatives to prove feasibility
  • Select optimal project configuration and design
  • Front-end engineering and design to confirm design and cost
  • Establish implementation timeline, critical path and project development cost estimate
  • Financing plan

The project will also require regulatory requirements and approvals through the Ontario Energy Board. The anticipated project duration from start to 'in service,' is 30 months.

Kincardine mayor Larry Kraemer said the most commonly-asked questions at the open houses were: when is the natural gas service coming, and how much will it cost?

He said the two alternatives to Union Gas were ones the committee didn't have a year ago.

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Sunday, December 29, 2013