LNG Canada May End Up With Double Its Initial Capacity

LNG Canada may end up with a total capacity of 28 million tons of the fuel annually, to be built in two phases, the project’s chief executive told Reuters on the sidelines of CERAWeek.

“We want to take FID on phase 2 before LNG flows from phase 1. (The partners) want to have some insight overall on the project before FID,” Andy Calitz said. First LNG from phase one is scheduled to start flowing in 2025.

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.

LNG Canada is a project of Shell, with a 40-percent stake, Malaysia’s Petronas with 25 percent, PetroChina with 15 percent, Mitsubishi with 15 percent, and South Korea’s Kogas with 5 percent.

The facility, which is expected to become operational before 2025, will initially have two liquefaction trains, each with a capacity of 6.5 million tons of LNG with the prospect of adding another two trains at a later stage, the consortium said at the time. Now, it looks like the prospects for LNG demand look bright enough to boost this and finalize the decision to do this early on.

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Yet there are problems around the project despite the approval of the British Columbia government, and these problems have to do with environmentalist and indigenous opposition. Most recently, LNG Canada made headlines when work on the pipeline that would feed natural gas to the B.C. coast liquefaction facility was halted after a couple of indigenous artifacts were found at the construction site.

The artifacts, according to the B.C. energy regulator, did not originate in the place where they were found. Some read this as the regulator insinuating that they were put there to stop work on the pipeline.

By Irina Slav for Oilprice.com

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