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A man looks as an LNG tanker crosses through the Suez Canal.STRINGER/Reuters

As Royal Dutch Shell PLC launches plans to press forward with a massive British Columbia natural gas export project, the Dutch giant is warning that Canada's gas production is under threat if it can't find new markets.

On Tuesday, Shell declared an official launch to a liquefied natural gas terminal project in Kitimat, B.C – one that has been years in the making, and previously confirmed by the company. The multi-billion-dollar plant would load 1.2 billion cubic feet per day onto tankers. A further expansion, already under consideration by the company, would double that.

But as it begins publicly discussing the project, pointing out that B.C. stands to gain from $600-billion in royalties in the next 25 years if the province can find buyers for its huge gas resource, Shell is also warning about the consequences of not sending energy to Asia.

With the rapid rise in U.S. natural gas production, from fast-growing shale gas plays, "we are at risk," Lorraine Mitchelmore, the company's Canadian president, said in an interview Tuesday. "You have to find a market for this product."

The Shell project is the third to formally propose sending gas out of Kitimat. Two others – Kitimat LNG, which has export approval to ship up to 1.4 billion cubic feet a day, and BC LNG, with approval to ship 230 million cubic feet a day – are farther along in the process. Kitimat LNG, however, has struggled to find buyers for its product, and its corporate backers – led by Apache Corp. – have delayed an investment decision that was expected for early this year.

On Tuesday, Shell gave details of its LNG terminal partnership, signed February, which give the company a 40 per cent interest, and 20 per cent each to Korea Gas Corp., Mitsubishi Corp., and PetroChina Co. Ltd.

Each are massive global players – Shell has some 40 years of experience in LNG, while KOGAS and Mitsubishi are important global LNG traders. That reduces some of the risk to the project which, even at its base 1.2 billion cubic feet a day would be large by global standards.

"It's 12 million tonnes per annum and that's about 15 per cent of Japan's market – which is the largest market in the world," said Ms. Mitchelmore. "It is world-class."

Shell is leading the project with workers in Houston, Calgary and the Netherlands, and intends to start front-end engineering and design on the terminal in 2013. A final investment decision could come in 2015, with construction complete by the end of the decade.

The company declined to disclose costs, save to acknowledge they will run into the billions. If Australia, which is experiencing an LNG boom, can serve as a guide, the base Shell project could run between $9.6-billion and $13.2-billion.

Australia is a chief competitor of Canada in developing an LNG trade. But Ms. Mitchelmore argued that Canadians don't understand how well B.C. is positioned to sell to Asian markets, which are a 10-day sail away. Australia is seven; Qatar, 13.

"We sit in a magnificent position," she said. And while Canada may be on "the fringe of our market in the U.S., we are now on the doorstep of the fastest-growing market" in Asia.

She pointed to predictions suggesting the Asian region could add another 80-million tonnes per year of LNG demand by the end of the decade, led by China which is trebling its gas demand. China does have its own natural gas supplies, and could one day become a significant producer of its own shale gas – but Shell does not believe those supplies will emerge fast enough to meet the demand.

"They will need so much more. That's why I keep saying that Canada has this unique opportunity," Ms. Mitchelmore said. Still, she said, while industry believes it has good visibility on the next decade of demand, the picture beyond then gets fuzzier.

"Who knows what's going to happen beyond then – where our competition will lie," she said. "We understand our competition now and we understand that we have a very competitive supply. But we need to make it happen."

Shell has already released a request seeking proposals from companies that can build a pipeline to feed the proposed terminal. The company's ambitions are large enough that it risks overstepping its own space. Expanding the project to 2.4 billion cubic feet a day would not only mean a much higher price tag, but would likely mean the company would have to find more real estate.

Shell secured the former Methanex Corp. port location in Kitimat last year, but local sources have said it's not large enough to support a huge development. Shell is "in a number of discussions" on securing more land, but it is "very early days," Ms. Mitchelmore said.

Both B.C.'s political leadership and its First Nations have largely been supportive of gas export plans. But Ms. Mitchelmore acknowledged the terminal will not be simple to build, pointing to the panoply of permits that must be secured and the difficulty in securing a large enough labour pool to build such an enormous terminal.

"This is a very highly complex project, that's why there's so much uncertainty," she said. "It's going to take a lot to bring that to the final investment decision."

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