At the moment, there is some general lack of awareness of the benefits of natural gas and available “Off Pipeline” solutions. Industry associations and the private sector have some work to do to ensure end users have accurate information when selecting fossil fuel energy for their operations. We also must dispel the myth that only those connected to pipelines have access to natural gas.”

Andrew Wilkins

VICE PRESIDENT, BUSINESS DEVELOPMENT AND MARKETING, DISTRIBUTED GAS SOLUTIONS CANADA (DGSC)

February 19, 2019

Distributed Gas Solutions Canada (DGSC) was established in 2017. Can you introduce the company and explain the circumstances surrounding its creation?

Distributed Gas Solutions Canada (DGSC) is a partnership that was created by three companies: Hydromega Services, a Montreal-based independent power producer experienced in the development of renewable energy projects since 1987; Galileo Advanced Solutions, the U.S. based commodity supply chain arm of manufacturer Galileo Technologies, which has been in the natural gas treatment, compression, and liquefaction business for 30 years; and Québec City-based Groupe Desgagnés, one of Canada’s leading marine transportation service companies operating since the 19th century.

DGSC’s business model leverages Galileo Technologies’ proven compression and liquefaction technology. We offer turnkey liquefied natural gas (LNG) and compressed natural gas (CNG) supply solutions for industrial and transportation end users in Canada that are not served by the pipeline infrastructure. Galileo Technologies developed a unique modular and scalable micro-liquefaction technology in 2014 and currently has 30 units in commercial operation globally.

What prompted DGSC’s founders to come together and create this new business entity?

The vision of the partners is that higher carbon fossil fuels will increasingly be displaced by clean, abundant and cost-effective natural gas. We see ever increasing national and international legislation to incentivize companies to reduce Greenhouse Gas emissions and air pollutants. Natural gas as a transition fuel can readily displace higher carbon fuels for power generation, as well as process and mobile equipment. Considering the high energy costs and environmental concerns associated with the mining industry, we consider LNG a logical solution that can be deployed now.

Why should mining companies consider a transition to natural gas as their energy source?

Mining companies are increasingly concerned about the environmental and economic costs of diesel fuel use, especially with government-imposed carbon reduction legislation on the horizon. DGSC’s modular, mobile and scalable compression and liquefaction technology can make LNG/CNG supply available to end users in remote areas of Québec and elsewhere in Canada. We produce LNG/CNG as close as possible to our clients’ operations, which reduces risk, emissions and costs associated with the transportation of LNG/CNG to where it is needed. We are able to optimize the CAPEX and supply chain within our turnkey solutions to offer the most economically competitive LNG/CNG delivered directly to mining sites.

How can LNG help with energy storage for mining operations?

If you take 600 cubic m of natural gas from a pipeline and it is liquefied, the same energy is condensed into 1 cubic m. Thus, there is a benefit to liquefying natural gas for storage and transportation purposes. At the client site, the LNG is stored and then vaporized back into a gaseous state to power Gensets, trucks and other industrial equipment. For mining trucks there are LNG conversion kits available that allow for LNG storage on the truck itself, and the gas is vaporized to fuel the engine. Currently, there are less than half a dozen LNG production facilities in Canada, which is clearly insufficient. DGSC’s micro-liquefaction technology allows for distributed LNG production in many locations across Canada.

What are the environmental and cost advantages of natural gas compared to traditional fossil fuels?

CO2 reductions of up to 25-35% and Nitrous Oxides (NOX) reductions of over 70% can be achieved, depending on which fuel is being displaced. There is a virtual elimination of Particulate Matter (PM) and Sulfur Oxides (SOX), which are air pollutants that cause smog and human health problems. North American natural gas reserves are vast, and the price is relatively low and less volatile than crude oil-based fuels. Diesel fuel rack pricing was approximately C$21.50/gigajoule (GJ), whereas natural gas was approximately C$5.50/GJ in Montreal in November.  At the moment, there is some general lack of awareness of the benefits of natural gas and available “Off Pipeline” solutions. Industry associations and the private sector have some work to do to ensure end users have accurate information when selecting fossil fuel energy for their operations. We also must dispel the myth that only those connected to pipelines have access to natural gas.

How significant are the initial CAPEX costs of installing LNG technology on a mine site?

If it is an existing mine in operation, there are costs associated with equipment retrofits. However, mines in development should carefully evaluate the LNG option, even those that are pipeline connected to fuel trucks. There is a mine that will be online next year in northern Canada that has purchased dual fuel engines that can run on diesel or natural gas. The delta cost between a multi-fuel and a straight diesel fuel engine was less than 2%. We are currently in discussions with a number of mines to ensure they are aware that DGSC can supply them with LNG by truck, by ship and eventually by rail, no matter where their operations are in Canada.

What would DGSC like to achieve in the mining industry in the next 18 months?

DGSC is prepared to invest in CAPEX and OPEX for our offerings, and we are seeking to sign multi-year LNG supply contracts with end users in the mining sector to provide them with safe, reliable and cost-effective energy.

DGSC wants to assist mines to reduce both their environmental footprint and energy costs by leveraging the benefits of natural gas: the transition fuel of the 21st century.

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