Massive LNG project in northern BC reportedly given the go-ahead

Mayor Phil Germuth is seen in a 2014 file

Mayor Phil Germuth is seen in a 2014 file

"LNG Canada demonstrates the ability of IOCs to fund projects off their balance sheets without third-party offtake agreement", Cowen said.

25%-owned LNG Canada's C$40 billion (about RM129 billion) liquefied natural gas (LNG) project is the largest private sector investment in the country's history, according to a statement on Canada Prime Minister Justin Trudeau's website.

Joint venture partner Petronas of Malaysia claims to be one of the largest resource owners in Canada with more than 52 trillion cubic feet in contingent resources. It's the first major LNG project to receive a FID in several years after numerous projects worldwide were either canceled or postponed during the plunge in global oil and gas prices from 2014 to 2017.

"Adding such a massive new source of (greenhouse gases) means that the rest of our economy will have to make even more sacrifices to meet our climate targets".

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.

The projects are seen as just the start, with a host of other approvals - known as final investment decisions (FIDs) - expected to follow after waiting in company drawers while LNG prices recovered from a three-year slump.

LNG Canada will also come on-stream around the same time as a number of U.S. -based LNG projects as part of the second wave of U.S. LNG production.

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The first phase of the project includes a $6.2-billion natural gas pipeline through northern British Columbia and an $18-billion liquefaction facility in Kitimat, B.C., where the natural gas will be super-cooled until it reaches a liquid state for transport to Asian markets.

The LNG plant is planned for Kitimat on British Colombia's coast, said LNG Canada CEO Andy Calitz.

He said a significant portion of the LNG Canada investment will be spent on a plant manufactured overseas, with steel sourced from other countries.

"Gas in Western Canada should be quite competitive", said Feer.

Horgan's minority NDP government only governs because of the support of the Green party and the premier said the province realizes the challenge the project brings for its climate change goals but it plans to work with the companies to drive down emissions. The line will range 676 kilometres to carry gas from BC to LNG Canada for export. "I believe we can create far more jobs in other industries that won't drastically increase our emissions". While LNG carriers from British Columbia would enjoy a straight shot to Asian markets, vessels departing U.S. Gulf Coast terminals do not enjoy direct access to the Pacific Ocean. Construction on the project is expected to begin this year, with a large-scale LNG export terminal in service by 2024.

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

"LNG export facilities tend not to occur in isolation", he said. Since the project will be built on Canada's west cost in British Columbia it can significantly reduce the time it takes to transport gas to key Asian markets compared to US based projects.

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