Chevron Corp. is halting funding for the Kitimat LNG joint venture in northern British Columbia after no buyers surfaced for the much-delayed project that revamped its designs in a bid to meet British Columbia’s climate goals.
California-based Chevron, through Chevron Canada Ltd., is behind the liquefied natural gas project that it co-owns with Australia’s Woodside Petroleum Ltd.
New designs for the export terminal, unveiled in mid-2019, promote electric-motor technology in an effort to comply with British Columbia’s clampdown on carbon emissions.
The Chevron-Woodside site is at Bish Cove, located on Haisla Nation reserve land near Kitimat, B.C.
“Despite the many challenges posed by COVID-19, Chevron engaged in a process to divest while continuing to work with its joint venture partner, Woodside, on agreed project activities that brought value to the asset or were required for regulatory and operational compliance,” Chevron said in a statement posted on its website. “At this time, it is Chevron’s intent to cease Chevron-funded further feasibility work for the proposed Kitimat LNG project.”
Various owners have poured hundreds of millions of dollars into site preparation at Bish Cove, but the project been effectively stalled for the past four years. Chevron and Woodside said in 2019 they would pursue “an all-electric plant powered by clean, renewable hydroelectricity from BC Hydro.”
Kitimat LNG’s proposed Pacific Trail Pipeline sought to transport natural gas from the Summit Lake area in the B.C. Interior to the terminal at Bish Cove.
Chevron couldn’t find buyers for its 50-per-cent interest in the Bish Cove project nor its 50-per-cent stake in Pacific Trail.
Pacific Trail has the backing of all 16 elected First Nations councils along the 475-kilometre route while the Haisla Nation supports Kitimat LNG.
By contrast, Wet’suwet’en Nation hereditary chiefs and their supporters oppose Pacific Trail and a separate natural gas pipeline, Coastal GasLink.
In December, 2019, Chevron announced its plan to divest its interest in Kitimat LNG, but this week, the company said no further funding is in the offing for Bish Cove. “Chevron’s other assets in Canada are not included in this decision,” it said.
The federal Conservative Party pinned part of the blame on the federal Liberal government. “Losing this project would be a major blow for local First Nations that support the project and would see investments and good-paying jobs leave their communities,” the Conservatives said in a statement late Thursday. “Failing to get this project built is not only a lost opportunity to reduce global emissions, it is also a lost economic opportunity for local First Nations communities and the rest of Canada.”
Kitimat LNG has said its liquefaction facility, relying on an electric-drive concept, would be one of the lowest emitters of greenhouse gas emissions of its type in the world.
While Kitimat LNG is stalled, work has been continuing on the Coastal GasLink project, where more than one-quarter of the pipeline’s total construction is already complete. The $6.6-billion Coastal GasLink line will transport natural gas from northeastern B.C. to LNG Canada’s $18-billion export terminal being built in Kitimat.
LNG Canada has vowed to operate at 0.15 carbon-dioxide equivalent tonnes for each tonne of LNG produced, a level below British Columbia’s limit of 0.16 for emissions intensity. LNG Canada will use natural gas in the liquefaction process in which high-efficiency turbines supercool gas into liquid form, while using hydroelectricity for a supporting role, including auxiliary power.
Chevron and Woodside said in 2019 that their Bish Cove terminal might be able to run at less than half of the 0.16 limit for emissions intensity.
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