A memorandum of understanding with an Ontario developer has been signed
Rod LinkAug 15, 2024 5:30 AM
The City of Terrace and its Kitselas First Nation partner in the Skeena Industrial Development Park south of the Northwest Regional Airport are back in the industrial development game.
This time the park is banking on an Ontario company being able to build a plant to produce hydrogen fuel.
Through a non-binding memorandum of understanding, the park “will work together on an opportunity, in this case a hydrogen production facility” with privately-held Source 3X of Oakville, Ontario, said city communications official Sarah Artis.
“[Memoranda of Understanding] are common and often the first step in many major developments. They help guide the expectations and responsibilities of the parties involved,” she added.
Hydrogen as a fuel is being touted as one of many alternatives to conventional oil and gas.
But isolating hydrogen as a fuel requires a substantial amount of electricity which, in this case would come from BC Hydro, itself being held out as a supplier of green energy.
Artis said Source 3X must now consult with BC Hydro about the amount of power it could supply, something that would then determine the viability of the project.
“At this time, there’s no defined design for the facility, other than it would utilize electrolysis with electricity supplied by BC Hydro, and potentially an independent power source like wind, geothermal or other. There’s no money involved, no timeline in place, and the exact potential economic benefits are unknown,” she said.
In a separate release, Source 3X chief executive officer and president Ayaz Khokhar outlined the company’s plan.
“Terrace is a major hub for energy, road and rail transportation in Pacific Canada, and we look forward to providing a pathway to decarbonize heavy-duty transportation and other industries,” said Khokhar.
“Once fully developed, the centre will produce up to 50,000 tonnes per annum of carbon-free hydrogen or its downstream products such as clean ammonia, e-fuels or sustainable aviation fuels annually.”
How much land would be needed, an estimated capital cost and explanations of clean ammonia, e-fuels or sustainable aviation fuels were not provided.
Source 3X emerged via a collaboration between Terrace, Prince George and Prince Rupert to use a provincial grant to explore the potential within the region for a hydrogen-fuel producing industry.
The company bills itself as an independent developer of clean energy projects.
Although the release indicates the company has various projects underway in B.C., Atlantic Canada and Ontario, it provides no details. The company’s website also provides no information on what these projects are and where they are located.
Khokhar has likewise not responded to emails seeking more information.
BC Hydro would not comment on any discussions it might be having with Source 3X, indicating that contact with the developer is preferred.
The crown corporation is, however, in the planning stages of building a second 500kV line from Prince George to its Skeena Substation south of Terrace. That follows requests it says it has from potential large scale customers.
Lands at the development park became available again last fall when a Chinese-based company could not provide the full scale of civil services as outlined in a purchase contract negotiated a decade ago to acquire approximately 1,000 acres of land.
The failure to meet deadlines triggered a buyback clause on the part of the park.
In effect, the park now has a suite of civil services for which it paid virtually nothing.
Although Source 3X has not responded to emails, industry website data indicates it takes an average 50 Kwh of electricity to produce one kilogram of hydrogen fuel.
At that calculation, the amount of power Source 3X could need to meet its intended 50,000 tonnes a year target would be enough to provide power to 250,000 households. That’s equivalent to 52 times as many households as there are in Terrace.
