LNG Canada Terminal
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LNG Canada is a proposed LNG terminal in British Columbia, Canada. It is currently under construction.[1]
Location
Project Details
Project Details, Trains 1 & 2
- Operator: Shell[2]
- Owner: LNG Canada
- Parent Company: Shell (40.00%), Petronas (25.00%), PetroChina (15.00%), Mitsubishi (15.00%), KOGAS (5.00%)[3]
- Status: Construction[4]
- Location: Kitimat, British Columbia, Canada
- Coordinates: 53.9245114,-128.7515172 (exact)
- Capacity: 14 mtpa[5]
- Trains: 2
- Status: Construction[4]
- Type: Export[6]
- Start Year: 2025[4]
- Financing: CAN$275 million from the Canadian government, loan financing of up to US$850 million from the Japan Bank for International Cooperation
- Cost: CAN$40 billion (US$31 billion)(trains 1-4)[7]
- Associated Infrastructure: Coastal GasLink Pipeline[8]
Project Details, Trains 3 & 4
- Owner: LNG Canada
- Parent Company: Shell (40.00%), Petronas (25.00%), PetroChina (15.00%), Mitsubishi (15.00%), KOGAS (5.00%)[3]
- Location: Kitimat, British Columbia, Canada
- Coordinates: 53.9245114,-128.7515172 (exact)
- Capacity: 14 mtpa[9]
- Trains: 2
- Status: Proposed[4]
- Type: Export[6]
- Start Year: 2025[4]
- Cost: CAN$40 billion (US$31 billion)(trains 1-4)[7]
- Associated Infrastructure: Coastal GasLink Pipeline[8]
Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day
Background
Shell's LNG Canada Terminal is a proposed LNG facility in British Columbia, Canada.[10] It will include two processing trains, with room to add two more trains in the future, for a possible total of four trains.[11] It received the required regulatory approvals from the government in 2015.[12]
"Shell is one of the biggest players in the global LNG market, so it’s no surprise that the corporation hoped to expand its holdings with a major facility in BC. Other big names attached to the LNG Canada project include PetroChina, China’s biggest oil producer; South Korea’s KOGAS, one of the world’s largest LNG importers; and Mitsubishi, which invests in LNG production in “host countries” and acts as an import agent for Japanese customers. The companies announced in July 2016 that they would indefinitely delay a final investment decision, and in mid-2017, announced that a final investment decision would be made “in the next 18 months or so.” If the proposal resumes, the backers hope to produce 24 million metric tons of LNG per year, using gas from the proposed 670-kilometer Coastal GasLink Pipeline leading from Dawson Creek in northeastern BC. The National Energy Board has extended LNG Canada’s export license from 25 to 40 years," according to the Sightline Institute's 2018 report, "Update: Mapping BC’s LNG Proposals."[8]
The estimated cost of the LNG Canada terminal is US$31 billion, making it the largest single private sector investment in Canada's history. The final investment decision for the project was announced in October 2018.[7]
Construction activities began in October 2018, with a target in-service date of the middle of the next decade.[13]
In February of 2020, the terminal was reported to still be under construction.[14]
In March 2020, the company announced that it is cutting its workforce in half as a precautionary measure against the Coronavirus and to help local communities deal with the outbreak. The cuts are being made to construction workers flying in on rotation though could be extended to cutting back staff numbers to levels required for only maintaining site security and environmental controls.[15]
In April 2020, Lloyd’s Register was chosen for a 55-month contract to support LNG Canada with the construction and delivery of the new LNG terminal.[16]
In April 2020, developers submitted an application for approval under the provisions of the Environmental Management Act. The application requested that developers be allowed to dispose of water from the construction and excavation of the new heavy haul road within the oxbow wetland into a nearby wooded area.[17]
In October 2020, it was reported that the project's COVID-19 related workforce disruptions had put it at least six months behind schedule, with investment research firm Webber Research & Advisory speculating that the delays may ultimately be measured in years. Cost overruns were also likely. LNG Canada indicated that its new target for shipping first LNG exports was 2025, a delay from its original target of 2023 or 2024.[4]
In July 2022, LNG Canada said construction was over 60% complete.[18] Urgency for the project's completion has reportedly exacerbated since the Russian invasion of Ukraine.[19]
A February 2023 analysis from the Institute for Energy Economics and Financial Analysis (IEEFA) found that cost estimates for the Coastal GasLink pipeline, which will supply LNG Canada Terminal, have risen by at least 70%, undermining the project's economic competitiveness.[20]
In March 2023, the final two modules for the LNG Canada project were being shipped from Qingdao port in Shandong province to the project site.[21]
As of July 2023, construction on the project was reportedly 85% complete.[22]
The annual GIIGNL report released in June 2024 said the project was on track for a late-2024 startup and 2025 begin to commercial operations.[23]
Opposition
There have been substantial delays to the nearby Jordan Cove LNG Terminal project, as protesters across Canada blockaded commuter and freight railways in solidarity with the Wet’suwet’en hereditary chiefs who have opposed the Coastal GasLink Pipeline, which would connect gas fields in northern B.C. with LNG Canada. There had been over 20 proposed LNG export projects proposed on the B.C. coast, but so far LNG Canada is the only project that is under construction, while other projects have been abandoned or delayed.[14]
Threat to British Columbia's Emissions' Reduction Target
A July 2020 report by the Canadian Centre for Policy Alternatives found that at full buildout the LNG Canada project will add an estimated four megatonnes of emissions a year at the terminal alone, with an additional nine megatonnes of upstream greenhouse gas emissions from fracking and transportation. The British Columbia government has pledged to reduce emissions by 80% from 2007 levels by 2050. However the report found that if LNG Canada comes online, emissions from just oil and gas production will exceed British Columbia’s 2050 climate target by 160%, even if emissions from the rest of the economy were reduced to zero.[24]
In January 2023, LNG Canada's CEO said that the proposed Phase 2 of the project would have to delay its plan to power the facility with renewable electricity because of a lack of available transmission infrastructure, thereby increasing emissions associated with the project.[25]
Financing
In June 2019, the Canadian government pledged to make a CAN$275 million investment in the project.[7] In October 2021, a press release (in Japanese) from the Japan Bank for International Corporation (JBIC) stated that the Japanese export credit agency has decided to provide up to US$850 million for the project. According to a statement from Japanese environment groups in reaction to the financing announcement, JBIC plans to provide US$1.85 billion overall for the project in likely partnership with Japan's three largest commercial banks – Mizuho, Sumitomo Mitsui Banking Corporation and MUFG. The groups argued that because these banks have already provided financing for the Coastal GasLink Pipeline project, it is likely that they will also be involved in the LNG Canada project.[26]
Articles and resources
References
- ↑ Government of Canada Invests in Kitimat LNG Facility The Maritime Executive, June 27, 2019
- ↑ IGU. 2023 World LNG Report. July 2023.
- ↑ 3.0 3.1 Media Kit, LNG Canada, accessed March 30, 2021
- ↑ 4.0 4.1 4.2 4.3 4.4 4.5 Corey Paul, "LNG Canada construction delay creates cost uncertainty, clouds world supply", S&P Global, Oct. 2, 2020
- ↑ 2020 World LNG Report, page 102, International Gas Union, April 27, 2020
- ↑ 6.0 6.1 Reuters Staff, A company of significance to all of Canada Malaysia's Petronas buys 25 percent stake in LNG Canada project, Reuters, May 31, 2018
- ↑ 7.0 7.1 7.2 7.3 "Government of Canada investing $275M in $40B Kitimat LNG complex," Green Car Congress, Jun. 27, 2019.
- ↑ 8.0 8.1 8.2 "Update: Mapping BC's LNG Proposals" Sightline Institute, January 2018
- ↑ A company of significance to all of Canada, LNG Canada, accessed March 30, 2021
- ↑ Shell British Columbia LNG Terminal, A Barrel Full, accessed April 2017
- ↑ LNG Canada Wikipedia, accessed July 18, 2019
- ↑ Government of Canada Invests in Kitimat LNG Facility The Maritime Executive, June 27, 2019
- ↑ Government of Canada Invests in Kitimat LNG Facility The Maritime Executive, June 27, 2019
- ↑ 14.0 14.1 Geoffrey Morgan, Another Canadian LNG project blocked as hits keep coming for natural gas producers, Calgary Herald, February 27, 2020
- ↑ LNG Canada says it's cutting its workforce in half to protect local communities from COVID-19 Vancouver Sun, Mar 18, 2020
- ↑ [1] LNG Industry, Apr. 7, 2020
- ↑ Environmental Protection Notice - application for approval LNG Canada, April 3, 2020
- ↑ LNG Canada more than 60 percent complete, pipeline deal reached. LNG Prime. July 28, 2022.
- ↑ "LNG Canada CEO says case for doubling export capacity 'very strong'". financialpost. Retrieved 2022-10-31.
- ↑ "IEEFA North America: British Columbia LNG project costs rising again". ieefa.org. Retrieved 2023-08-23.
- ↑ GIIGNL. The LNG Industry: GIIGNL Annual Report 2023. July 14, 2023.
- ↑ Oil & Gas Journal. LNG Canada construction advances, project 85% complete. July 18, 2023.
- ↑ GIIGNL. The LNG Industry: Annual GIIGNL Report. June 2024.
- ↑ David Hughes, BC's Carbon Conundrum: Why LNG exports doom emissions-reduction targets and compromise Canada's long-term energy security, Canadian Centre for Policy Alternatives, July 2020
- ↑ "Exclusive: Electricity constraints force Canada's first LNG terminal to delay renewable shift". Reuters. Retrieved 2023-08-23.
- ↑ JBIC and Private Banks Must Reconsider Decision to Finance LNG Canada Project – NGOs Strongly Condemn JBIC's Decision to Provide Public Finance That Ignores Climate Crisis and Rights of Indigenous Peoples Ahead of COP 26, Press Release from Friends of the Earth Japan, Japan Center for a Sustainable Environment and Society (JACSES), 350.org Japan, Mekong Watch, Kiko Network, Oct. 29, 2021
