Yukon mine wants to sell LNG power into Yukon Energy grid

A Yukon mining company has plans to build a liquefied natural gas power plant in Burwash Landing that it says may one day feed power back into Yukon Energy's electrical grid.

A Yukon mining company has plans to build a liquefied natural gas power plant in Burwash Landing that it says may one day feed power back into Yukon Energy’s electrical grid.

Wellgreen Platinum’s senior vice-president, John Sagman, said Yukon Energy and Energy Minister Scott Kent have indicated on “numerous occasions” that they’d like the mine’s LNG plant to be built in Burwash Landing.

“Rather than put the generation plant at the mine site, we’d rather build it near the Kluane First Nation and feed the power into the Yukon grid eventually,” Sagman said during a presentation at the Yukon Geoscience Forum & Trade Show this week.

Currently, Burwash Landing and Destruction Bay are isolated from the territory’s main electricity grid and rely heavily on diesel. Their power is supplied by ATCO Electric Yukon.

But Sagman said that both Wellgreen and Yukon Energy eventually want to see a power line built from Haines Junction through Burwash Landing and Destruction Bay up to Beaver Creek, and then across to Mayo.

“And that opens up that whole territory for power,” he said, “be it hydro power, be it LNG power that feeds into the grid.”

Sagman said Wellgreen’s current plan is to build the LNG plant in Burwash Landing and construct a 40-kilometre transmission line that would connect it to the mine site. The Kluane First Nation would own and operate the plant, and would use LNG power to replace diesel in the communities.

“And then eventually, one day, (Yukon Energy’s) grid will come through and hook into our system,” he said. “And when the mine shuts down… that generation power would be right there to keep feeding into the grid.”

However, Yukon Energy has not confirmed that any such talks have taken place. Spokesperson Janet Patterson said she is not aware of any plan to extend the grid to Beaver Creek from Haines Junction. She also said Yukon Energy vice-president Michael Brandt, who was present at Sagman’s presentation, was “surprised” by some of his claims.

But Colin Asselstine, general manager of the Kluane Community Development Corporation, did confirm that discussions have at least taken place between Wellgreen and the First Nation.

“It’s been talked about for quite some time now,” he said. “Once the mine life is done, it’s a possible legacy project that’s left behind.”

Asselstine said it was possible the power plant could fully replace diesel in Burwash Landing and Destruction Bay, though he cautioned that these are very early days.

“I think it could be a good substitute for diesel in the community, as long as it’s done properly,” he said.

He also said it’s possible the First Nation could sell excess power into an expanded grid one day.

“It’s kind of in the back of people’s heads,” he said. “That’s kind of long-term thinking.”

Sagman said Wellgreen hopes to start construction on its platinum mine by 2018, and to go into production in 2020.

Wellgreen’s plans raise some questions about the Yukon government’s recently released independent power production policy, and whether it’s partly targeted toward the territory’s mines. According to the policy, Yukon’s utilities can put out calls for power and can receive unsolicited proposals for larger power projects. Natural gas is an eligible form of power for those programs.

Shane Andre, the director of the energy branch with the Department of Energy, Mines and Resources, told the News last week that “it would be rare that a natural gas proposal would be considered” under those programs.

But during Monday’s presentation, Kent said the unsolicited proposal program would be “of interest” to mining companies.

“As far as the natural gas piece, obviously some of the mines… would be candidates,” he later told the News. “But… that’s not to preclude other projects from going forward.”

During his speech, Brandt said several Yukon mining companies are considering LNG power for their operations, including Western Copper and Gold, Selwyn Chihong and Victoria Gold.

“The future of LNG rests with mining,” he told the audience.

But it’s unclear whether any of those mines would be able to sell power into the Yukon grid in the foreseeable future.

Western Copper and Gold president Paul West-Sells said his company does plan for the Casino mine to be powered by LNG. But he pointed out that the mine site is at least 100 kilometres from the existing grid, and said it wouldn’t make sense to build such a long transmission line.

“That’s not something that we’ve really looked at,” he said. “There’s no benefit for us to do that.”

In an email to the News, Patterson said no mining companies have approached Yukon Energy with the idea of selling LNG power into the grid.

“A lot of the mines that could potentially come on stream in the next several years are located quite a distance from the grid, so the economics of connecting them to the grid are questionable,” she wrote. “There are a couple that are closer to the grid – Victoria Gold and Copper North for example – but … we haven’t had any discussions with them.”

Contact Maura Forrest at

maura.forrest@yukon-news.com

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