RICHARD GILBERT, Journal of Commerce, May 21, 2012
Another multi-billion dollar LNG terminal proposed for Kitimat
A group of companies led by Shell are developing plans for the construction of a liquefied natural gas (LNG) export facility near Kitimat, British Columbia.
“Our combined expertise, and our focus on technological innovation in delivering safe and environmentally sound LNG projects around the globe, ensures that our LNG Canada project would be well-suited to deliver long-term value for British Columbia and increase access to new export markets for Canada,” said Jose-Alberto Lima, vice president LNG Americas, Shell Energy Resources Company.
The partners include Korea Gas Corporation (KOGAS), Mitsubishi Corporation, and PetroChina Company Limited.
They will decide whether to move ahead with the project’s development after conducting engineering work and environmental assessments.
This announcement also begins the formal consultation process with First Nations and the local community.
The proposed project includes the design, construction and operation of a gas liquefaction plant and facilities for the storage and export of LNG, including marine off-loading facilities and shipping.
The project is expected to create thousands of jobs during construction and hundreds of full-time, permanent jobs during operations.
LNG Canada will initially have two LNG processing units, or “trains,” each with the capacity to produce six million tonnes of LNG annually, with an option to expand the project in the future.
Start-up could come around the end of the decade, assuming all the necessary regulatory approvals are obtained and investment decisions made.
“As the world’s largest LNG buyer and operator of LNG terminals, we recognize the potential value of the LNG Canada project for our company and for British Columbia, and we look forward to conducting business in B.C., with respect for all local residents and their traditions,” said Young Sik Kwon, vice president of Korea Gas Corporation.
The partners want to take advantage of Western Canada’s abundant supplies of natural gas, by exporting the commodity to global markets, in particular Asia.
Shell holds a 40 per cent interest in the LNG Canada project, with KOGAS, Mitsubishi and PetroChina each holding a 20 per cent stake.
This project is one of several LNG terminals proposed for Kitimat.
Encana has formed a new partnership with the operator Apache Canada Ltd. and EOG Resources Canada Inc., for a proposed $4.2 billion LNG project. [Kitimat LNG]
This involves the construction of a 36-inch diameter natural gas pipeline, which will run about 463 kilometres from the Spectra Energy natural gas transmission system at Summit Lake, B.C. to the terminal facility near the Port of Kitimat.
The partners have completed the front-end engineering and design for the LNG export facility.
Project construction could begin in 2012, with exports potentially starting in 2015.
BC LNG Cooperative, which is joint venture between the Haisla Nation and LNG Partners of Houston, is planning to construct and operate a liquefied natural gas export terminal at Bish Cove [Correction: between Bish Cove and Kitimat] near the Port of Kitimat. [Douglas Channel Energy Partnership (DCEP)]
The project includes the construction of a shoreline LNG tanker berthing and uploading jetty, tug boat berth, several pipelines and the upgrading and extension of the access road.
The proposed terminal will take delivery of gas via a pipeline lateral, about 15 kilometres long, from the Pacific Trail Pipelines.
This pipeline will be connected to the existing Spectra Energy’s Westcoast Pipeline system.
The construction of the terminal will employ 150-200 people over 18 to 24 months and will cost between $360 million and $450 million.
Once operational, the facility will employ about 30-40 permanent employees.
Analysts expect Japan’s nuclear crisis to drive up LNG demand, as the country struggles to make up lost power supply, providing a growth market for this new export capacity.
The earthquake caused little damage to LNG import terminals, except one in Sendai, and the country has under-utilized capability at natural gas-fired plants.
Kitimat is also proposed as the western end of Enbridge’s planned $5.5 billion dollar Northern Gateway Pipeline to carry oilsands crude from a terminal near Edmonton.