Canada: Advanced Explorations Moves Forward with LNG Power Solution for Roche Bay Iron Project

Advanced Exploration said that it has received unanimous Board approval to advance further engineering studies on its LNG Power solution for the Roche Bay Iron Project.

The objective of this further engineering work is to determine the full extent of the advantages derived from a start-up scenario that would include LNG Power. This opportunity was identified by the recently released Roche Bay Feasibility Study which indicated the potential to reduce the project’s FOB operating cost (Opex) by approximately $8/t to $42/t for the base case 5.5 mtpa operation. These potential operating savings, which could be generated by an LNG Power option, support the Roche Bay Project OPEX objectives of becoming a lower quartile FOB cost producer.

AEI has investigated the LNG power option for over 18 months and, in its research, was also advised by some of the world’s industry leaders. The Company is confident that an LNG power option is an affordable and viable option for power generation at Roche Bay. AEI’s partner for the Roche Bay Project, XinXing Ductile Iron Pipes Co. Ltd. (XDIP), who has expertise in LNG, has also committed to work with the Company to better understand the economics of this power solution and whether or not the engineering can be accelerated to align with the project’s start-up option schedule. Encouraged by AEI’s Board of Directors and XDIP, the Company is currently finalizing plans to initiate a pre-feasibility study on the LNG power option that will provide insight on the viability of a turnkey power plant solution at Roche Bay.

The final report of the Alternative Power Concept Study, which was initiated on collaboration between AEI and the Government of Nunavut, is also expected to be completed shortly, and the Company is looking forward to being able to extend its collaboration with Nunavut.

John Gingerich, President & CEO, commented:

“AEI has concluded that there is considerable potential to deliver a sustainable and cost-efficient alternative power solution for the Roche Bay Project. Moreover, the knowledge gained from the engineering studies will provide a useful platform to solve one of the key challenges facing development of Canada’s north; affordable power. Advanced studies on the LNG power will ultimately assist other resource development projects to gain operating cost efficiencies, such to ensure a competitive cost base for future developments in the north. Equally important is to apply these solutions, where appropriate, to reduce costs in our northern communities that are allocating significant amounts of their limited resources to Arctic diesel power generation“.

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LNG World News Staff, November 2, 2012; Image: Advanced Explorations