Thousands of construction workers may be seeing more work this year in northwest British Columbia, as a consortium of resource giants, including Shell Canada, are planning a $12 billion liquefied natural gas (LNG) export facility at Kitimat.
The project could see millions of tonnes of LNG exported from Kitimat each year. What the companies are now calling LNG Canada would be built in two or three stages, with each capable of producing six million tonnes. A news release from Shell says there is an option to expand the project beyond the 12 million tonne capacity.
Shell's partners are Korea Gas Corp., Mitsubishi Corp. and PetroChina Company Ltd. While the consortium released no price estimates, reports in Japanese media and from industry sources estimate the project could cost as much as US$12 billion.
Shell holds a 40 per cent working interest. The partners each hold a 20 per cent working interest.
Kitimat Mayor Joanne Monaghan said the city is getting ready: "Council have been aware of it and have rolled up their sleeves for almost a year-and-a-half to two years."
One aspect was preparing Kitimat for the project, Monaghan said.
"We had to make sure there were hospital facilities, rental facilities, that we had housing available. We were getting all our inventories together. Now we know and now we can go full blast ahead."
She hopes that Kitimat will return to its population peak of between 10,000 and 15,000 residents.
"If they have the five to seven thousand construction workers they're looking for, they will bring in workers from all over B.C., probably all over Canada," Monaghan said.
Two other LNG projects in Kitimat are already underway. The Kitimat LNG plant project, led by Apache Corp., Encana Corp. and EOG Resources, will likely start up in 2015. That project has been approved by the National Energy Board but is still awaiting a final go ahead from the boards of the three corporations, expected in the fourth quarter of 2012.
A separate project, BC LNG, owned by the Haisla Nation in partnership with Houston-based LNG Partners, will act as broker and exporter for other LNG companies, facilitating exports to Asia from a barge-based facility. The first shipment is expected in 2014 or 2015.
from Western Investor July 2012
