Kitimat, B.C., is benefiting from major industries like an aluminum smelter and a new LNG export facility, with further investments literally in the pipeline.
The town of about 8,200 residents in the North Coast region of B.C. did not exist in 1950. In the early ‘50s, the Aluminum Company of Canada (later Alcan and now Rio Tinto Alcan) acquired the land for a new smelter, and a new community was born.
“Industry is the only reason we exist,” said Mayor Phil Germuth, District of Kitimat.
The original smelter started up in the mid ‘50s. In 1970, Eurocan Pulp and Paper came to town, followed by the Methanex methanol plant in 1980. While Methanex and Eurocan closed in 2005 and 2010, respectively, the smelter endured.
Though it currently employs about 1,000 full-time workers plus indirect employment, the smelter is now being overshadowed by another behemoth in Kitimat: LNG Canada.
With 9,000 workers at its 2024 peak, LNG Canada is set to export its first LNG cargoes by this July. The project, a joint venture between Shell, Petronas, Mitsubishi Corp., PetroChina and Korea Gas Corp. (Kogas), is expected to employ 250 to 350 full-time workers once fully operational.
An investment decision will also be made about a second phase, which would entail at least five more years of major construction, with lower incremental costs due to existing infrastructure.
“If you look at the global LNG market and what’s happening politically around the globe, it sure looks very positive that that decision will come,” said Germuth.
And the gas is expected to keep flowing.
Though a much smaller project, Cedar LNG is in the early stages, with preliminary construction and clearing work now underway. It is a partnership between Pembina Pipeline Corp. and the Haisla Nation, who negotiated a certain capacity in the pipeline for their own energy sources.
Meanwhile, there’s the original Kitimat LNG site that belongs to Chevron and Woodside Energy and is undergoing a multi-million-dollar remediation.
“I wouldn’t be surprised, with what’s taken place over the last couple of months, if there’s probably some interest in it now,” said Ron Burnett, president, Kitimat Economic Development Association.
A March deal between Alberta Premier Danielle Smith and the Japan Organization for Metals and Energy Security to supply LNG and ammonia to Japan could renew interest in the Kitimat LNG site, which was shelved in 2021.
“If that actually goes ahead, it’s got to be exported from somewhere, so it’s probably either [Kitimat] or Prince Rupert, so this site would be perfect for that,” said Burnett.
As Kitimat buzzes with activity, local housing investment is needed. The LNG Canada workers have been living in a workcamp, but Burnett said the town’s housing stock is aging and upgrades are needed.
Most of the housing was built in early waves, he said, and today’s sales and values are steady.
“Most of our housing is fairly old, having been an instant town in the ‘50s, and then again when the pulp mill came in the ‘60s, there was a big surge in housing and not a whole lot in between,” said Burnett.
U.S. tariffs are a concern but there is no panic, said Germuth. He said Rio Tinto has valuable attributes such as its West Coast location, its environmental standards and its creation of special alloys.
“It’s clear that we have things [the U.S.] needs and they have things we need. Especially when it comes to aluminum, they clearly do not have enough smelters or capacity or anywhere near it,” said Germuth.
The trade war may be one reason why B.C. Premier David Eby recently pivoted toward industry.
“As of the resource conference in Prince George, all of a sudden Eby is a big fan of LNG. The words wouldn’t even cross his lips six months ago,” said Burnett.
With renewed political appetite for resource projects, Kitimat is at the centre of the action.
As the aluminum smelter works to diversify its exports beyond America, local leaders hope the new LNG facility will also support decades of prosperity.
“The future is looking pretty bright here,” said Germuth. “It’s a great time to be mayor.”
