Country Report - Canada to the Usa

Country Report

Canada to the USA

This report is a comparative logistics report examining the importation process of Liquid Natural Gas (LNG) from Canada to the US. The report is ultimately trying to answer the question; "What does it take to get this product into the United States?" Our sponsor, Alan Hatfield provided us with information on a project that his company, Bramemar Wavespec USA, helped consult on when transporting LNG from Canada to the United States.

Contents

Introduction 2

Company Information 2

Liquefied Natural Gas (LNG) 2

Project Introduction 3

PART I 3

Cultural Issues 3

Social Issues 4

Geographical Issues 4

Part II 5

Part III 6

LNG Supply Chain 6

The LNG supply chain as illustrated in the figure below 6

Natural Gas Costs 7

Pipeline Costs 7

Cost Estimates for the use of trucked LNG 9

Part IV 10

Our Recommendation: Import LNG via Pipeline 10

Introduction

Our team's country report will focus on the supply chain of Braemar Wavespec USA, Inc. The product we are tracking is liquefied natural gas, commonly referred to as LNG. Our product, in gas form is simply called natural gas. Now, Braemar Wavespec USA, Inc. imports LNG from Quebec City in Canada to Portland, Maine. Our goal is to provide and analyze information about the corporation and the product, LNG, to better understand the supply chain of Braemar Wavespec USA, Inc.

Company Information

Braemar Wavespec USA, Inc. is part of Wavespec Ltd. Wavespec ltd. is a well-established marine engineering consultancy, headquartered in Maldon, Essex, UK. In 2009, Wavespec opened its U.S. office in Houston, Texas- the center of the oil and gas industry in the United States, as well as the offshore industry. Wavespec Limited was a wholly owned subsidiary of Braemar Seascope Group Plc, which has more than 900 professionals and more than forty years of combined consulting experience in helping clients manage the world's natural, physical, and economic resources. Recently, it was consolidated into a larger technical group, Braemar Engineering.

Braemar Wavespec USA, Inc. now operates LNG import, liquefaction, and transportation from all over the world. It includes gas pipelines, marine berths, LNG storage, liquefaction, and LNG loading facilities. We will focus on the import from Quebec City to Portland.

Liquefied Natural Gas (LNG)

LNG stands for Liquefied Natural Gas. It is a clear, colorless, odorless, and non-toxic liquid. During a process called liquefaction, natural gas is chilled and condensed to -260 degrees Fahrenheit, resulting in the gas becoming a liquid. Six hundred cubic feet of gas can be condensed into one cubic foot of LNG, making it more practical to store and transport across long distances via specially designed transport vessels.

In many states in the US, such as Maine, natural gas is used as fuel to generate electricity and other uses, including residential and commercial heating and cooking. In fact, the United States relies on clean-burning natural gas for approximately 25 percent of its energy needs.

Project Introduction

Natural gas demand in America is projected to increase by an average of 1.8 percent annually from 2001 to 2025, while production is expected to increase by only 0.7 percent annually over the same period. Domestic supplies cannot keep up with the growing demand for natural gas. Braemar Wavespec USA, Inc. operates LNG import to respond to the projected supply shortage within the American market. The LNG supply chain takes wellhead natural gas from overseas, converts it to LNG, transports LNG by truck, and offloads at user locations to storage, and returns LNG to natural gas by warming with hot water for use in power generation and vehicle fuel.

PART I

Braemar Wavespec USA, Inc. now imports LNG from Quebec City, Quebec and transports it to Portland, Maine the United States.

Cultural Issues

The Culture of Quebec emerged over the last few hundred years, resulting from the shared history of the French-speaking majority in Quebec. It is unique to the Western World; Quebec is the only region in North America with a French-speaking majority, as well as one of only two provinces in Canada where French is a constitutionally-recognized official language. Quebec City may be part of Canada, but its heart and soul is strictly French, with plenty of Native Canadian and European influence. Walking through the city, visitors may easily feel that they are in a major European city, with the old-world style architecture, streets, and things like French bakeries, specialty shops, coffee houses, and gourmet restaurants. A major cultural highlight of Quebec is the February Winter Carnival, a sort of frozen, more family-friendly equivalent to the Mardis Gras celebration in New Orleans.

Social Issues

As of 2011, the city has a population of 516,222, making it the second most populous city in Quebec after Montreal. Most jobs in Quebec City are concentrated in public administration, services, commerce, transport and tourism. In 2008, the unemployment rate in Quebec City was 4.5%, well below provincial and national averages, 7.3% and 6.6%, respectively.

Quebec City is a festival town, with world class festivals and events in the fields of comedy, popular and military music, fireworks, as well as the New France Festival, the Winter Carnival, and the now ever more popular Red Bull Crashed Ice skating race. As well as having a number of local sports teams, Quebec City has hosted a number of sporting events.

Geographical Issues

Quebec City is located in the Saint Lawrence River valley, on the north bank of the Saint Lawrence River near its meeting with the St. Charles River. The region is low-lying and flat. The river valley has rich, arable soil, which makes