Huge LNG Project in BC Given Final Approval by Shareholders

Ismael LynchOct 05, 2018

Hours after LNG Canada was officially confirmed, TransCanada Corp. said it will proceed with construction of its $6.2-billion Coastal GasLink pipeline to connect Kitimat, B.C., the site of the LNG plant, with the Montney gas-producing region.

On Tuesday, the Royal Dutch Shell-led C$40 bn (US$32 bn) LNG Canada project announced that its project partners had reached a final investment decision (FID).

Stakeholders Royal Dutch Shell, Malaysia's Petroliam Nasional Bhd, PetroChina Co Ltd, Korea Gas Corp and Japan's Mitsubishi Corp have given final investment decisions, LNG Canada said on its website.

LNG Canada's initial investment approval is for production of 14 million tons per year.

Gas traditionally sells for more in NY because it's closer to major population centres but the difference has been widening recently due to pipeline capacity constraints in Alberta and B.C.

"It will be significantly challenging for all of us but with the revenue, some $23 billion coming to the province from this project, we will be able to innovate, work with renewables, work with Shell and the joint venture partners to bring down emissions over the long term".

But LNG Canada's ability to provide a new market for Western Canadian natural gas and thus support severely depressed prices won't be seen until the facility and its main supply pipeline are built sometime in the middle of the next decade.

LNG Canada CEO Andy Calitz says the project received support from the B.C. government, local First Nations and the Kitimat community.

"We welcome the unprecedented commitment shown by the LNG Canada partners to work within our province's ambitious climate goals", he said in the same statement.

LNG Canada has officially gotten the final approval from joint venture participants to move forward with the largest project in British Columbian history. "I believe we can create far more jobs in other industries that won't drastically increase our emissions". Construction on the project is expected to begin this year, with a large-scale LNG export terminal in service by 2024.

But neither are likely to help Trans Mountain, the troubled oil pipeline project that has epitomized the country's inability to get big projects done and for which Prime Minister Justin Trudeau needs to find a buyer if it's ever to get it built.

"It's irresponsible to green-light a project that's overall carbon pollution is staggering - much larger than what industry and government report - especially when there is no clear climate strategy showing how B.C. will meet its legislated carbon pollution targets", David Suzuki Foundation science and policy director Ian Bruce said in a release.

"This [is] the biggest project sanction globally since the Tengiz expansion was approved in 2016, and the biggest greenfield project to be sanctioned since Yamal LNG in 2013".

The time is dramatically short compared with 20 days from facilities in the southern United States.

"The momentum behind LNG Canada reflects the drastic improvement in the LNG market over the past 12 months, driven by buoyant demand in China".

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