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Two of the five partners in the US$31-billion LNG Canada project for exporting liquefied natural gas from Canada’s west coast approved their respective portions of investment on Friday, in what analysts see as a step toward an imminent positive final investment decision that could give the go-ahead to the largest LNG project in years and drive the next wave of LNG approvals.
LNG Canada is a joint venture among Shell, Malaysia’s Petronas, PetroChina, Japan’s Mitsubishi, and Korea Gas Corporation (KOGAS).
On Friday, PetroChina said in a stock exchange filing that it had approved its share of US$3.46 billion investment in the project, while KOGAS also said that it approved its part of investment.
In order for the project to reach FID, all partners in the project have to make similar investment decisions. A spokesman for Japan’s Mitsubishi told Bloomberg on Friday that the company hadn’t yet made a decision.
The project was once delayed; in July 2016, LNG Canada’s joint venture partners delayed the FID that was expected by end-2016, due to “global industry challenges, including capital constraints,” saying that it would need more time to evaluate the project.
Now analysts think that the partners will decide to go ahead with the project, which is designed to export 26 million tons of LNG to Asia, seizing market opportunities in the Asian market and giving a shot in the arm to the Canadian energy industry.
Related: Qatar To Boost LNG Capacity To Seize Market Opportunities
“LNG Canada looks like it is pretty much getting over the line, so deciding not to go ahead with it now would be a big surprise,” Trevor Sikorski, an analyst at Energy Aspects, told Bloomberg.
Earlier this week, Bloomberg reported that preparations are under way for an FID announcement as early as October 5, with all signs pointing to a positive decision.
Earlier this year, the British Columbia government said that it was offering the LNG Canada project tax breaks that boost the chances of getting a final investment decision. Unlike its fierce opposition to the Trans Mountain oil pipeline expansion project, B.C. supports the LNG Canada project.
Last week, Andy Calitz, CEO at LNG Canada, told Bloomberg that the overall conditions to go ahead are quite good, and “That is, and feels, so very different to 2016 when the project was delayed.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.