The federal Canadian government is investing US$208 million (C$275 million) in the LNG Canada project: the first of this magnitude in the country and the energy project that won the heart of the fossil fuel-wary government of British Columbia.
CBC quotes Finance Minister Bill Morneau as saying "The Government of Canada is proud to support this historic $40 billion project that will get our resources to new markets."
The project is indeed historic: it is the second one proposed for the western Canadian cost, which would get local LNG to global markets and the first that may actually succeed after Petronas pulled the plug on the first one citing unfavorable market conditions. It is because of this bad experience perhaps that both provincial and federal governments are supporting the project in any way they can.
Ottawa's money would go into buying energy-efficient gas turbines for the project, to be located in Kitimat, B.C., as well as a replacement for the Haisla Bridge in the town as the project would lead to a lot more intensive traffic.
Earlier this year, the British Columbia government for its part announced tax incentives for energy companies to make sure the project will go through. "British Columbians are counting on us to attract LNG investment that meets strict conditions: delivering jobs and financial benefits to B.C., creating economic partnerships with Indigenous peoples and protecting our clean air, land and water," the province's Finance Minister Carole James said at the time.
The five companies behind the US$31 billion (C$40 billion) LNG Canada project announced their final investment decision on the project last October, ending months of uncertainty and worry that the large-scale project could become the second failed LNG initiative in British Columbia after Petronas quit its proposed Pacific North West project on depressed LNG prices.
Now, the project partners are so optimistic, it seems, that the facility might end up with twice the originally planned capacity of 14 million tons of LNG.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More