BC Ferries will order three new intermediate-class vessels and intends to acquire ships that are fuelled by liquefied natural gas.

The ferry service announced Tuesday that its application for the three new ships was approved by the ferries commissioner. It said the new vessels will replace two ships that were set to be retired in 2016 – the 48-year-old Queen of Burnaby, which runs between Comox and Powell River, and the 49-year-old Queen of Nanaimo, which is on the Tsawwassen to Southern Gulf Islands route. The addition of one ship is intended to increase service on the latter.

Mike Corrigan, BC Ferries' president and chief executive officer, wouldn't disclose the anticipated costs of the new ships. He said the corporation has a budget in mind, in the hundreds of millions of dollars, but won't release it for cost-competitive reasons.

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Mr. Corrigan said BC Ferries would prefer ships that are LNG-fuelled. These ships have higher initial costs, he said, but also have lower overall life-cycle costs than those equipped with diesel.

"We're bullish on LNG, but we haven't made any final decisions. There's two parts to that. Number one is we've got to see what the price premium we have to pay with shipyards to design and build natural gas fuelled ferries is," he said. "… And then we have to see what the delivered price of the fuel is to our terminals, or to our ships, versus diesel."

Premier Christy Clark has said LNG is B.C.'s ticket to a debt-free future. Her LNG strategy calls for three plants to be running by 2020. The province has said LNG projects are expected to produce $1-trillion in economic activity over the next 30 years.

B.C. Ferries will issue a request for pre-qualification later this month and is inviting Canadian and international shipyards to participate. The contract will likely be awarded in early 2014.

Mr. Corrigan said he'd like to see a B.C or at least Canadian yard be successful.

"But it really comes down to what comes back in the pre-qualification phase of our tendering process," he said. "First of all, which yards want to participate? And second of all, do they have the capacity to be able to participate? They may have full order books, they may have no capacity left to be able to build our ships, so we've got to see where it all shakes out."

BC Ferries' first priority, he added, is delivering quality vessels while keeping fares as low as possible.

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The first two ferries – which will be capable of carrying 145 vehicles and up to 600 passengers – are expected in service in 2016. The third vessel – which will be able to carry 125 vehicles and 600 passengers – is expected in 2017.

Mr. Corrigan said he'd like to see ridership numbers go up with the new ferries, but it's difficult to predict if they will.

Gord Macatee, the ferries commissioner, was out of the country Tuesday and could not be reached for comment.