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Stornoway to proceed with LNG power plant

LNG Industry,

Stornoway Diamond Corporation has announced the results of a recent feasibility study on the viability of a liquefied natural gas (LNG) fuelled power plant for the Renard Diamond Project, Canada.

The study, run by SNC-Lavalin Inc. and AMEC America Ltd under the Renard Project EPCM joint venture, demonstrates substantial benefits to the project in terms of annual operating cost and environmental emissions compared to the currently planned diesel generator-sets option.

Highlights of the study include:

  • Annual operating cost reductions of between US$ 8 million and US$ 10 million over the initial 11 year mine life, representing a life of mine operating cost saving of US$ 89 million.
  • Incremental capital cost of only US$ 2.6 million over the cost of diesel generator-sets, representing a net payback of 4 months.
  • An estimated reduction in greenhouse gas emissions of 43%, with significant reductions in NO2 and SO2.
  • Stable LNG local supply market based on existing commercial distribution network within Québec.

Economic benefits
Matt Manson, President and CEO, commented: “Since the release of the Renard Diamond Project Feasibility Study in November 2011 and the subsequent Optimisation Study in January 2013, we have been investigating more efficient alternatives for power supply at the project compared to the traditional diesel option contained within the current execution plan. A July 2012 Hydro-Québec feasibility study into a powerline for the project demonstrated only a marginal economic benefit of using grid power owing to the high cost for powerline construction. The LNG option now provides us with a much more attractive way forward, with off-the-shelf technology, a positive long-term supply outlook, a much smaller environmental footprint and immediate economic benefits for the project through substantially reduced operating costs“.

The LNG option has been made possible for Stornoway Diamond Corp thanks to an all-season road that permits the company to receive regular shipments of liquefied gas from the existing commercial distribution network in Québec, without the need for expensive high-capacity on-site storage facilities. The study has been completed in time to have it included in the final project execution plan prior to the planned commencement of project construction in 2014.

LNG power generation
The LNG power plant will comprise seven 2.1 MW rated gas gen-sets, providing sufficient power generation capacity for the project’s normal operating specification of 9.5 MW, which represents five gen-sets operating at a planned 92% efficiency. Onsite gas storage will last for 10 days, with new supplies delivered daily by cryogenic tanker truck from the existing Gaz Metro Liquefaction plant and distribution centre in Montréal. In addition to power generation, the LNG will be used for heating of buildings and the underground mine, removing the requirement for onsite propane. A smaller quantity of diesel will continue to be used at the site for construction activities and mobile mining equipment.

Adapted from press release by Katie Woodward

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