A liquefied natural gas venture in British Columbia led by Malaysia's Petronas anticipates having to hire hundreds of skilled foreign workers during construction, underlining the skills shortage in Canada and the challenges of recruiting labour to build energy megaprojects.
Skilled foreign workers will account for almost 40 per cent of the work force required to build the proposed Pacific NorthWest LNG terminal near Prince Rupert, according to regulatory filings. At the peak of construction, there could be roughly 2,460 Canadian workers and 1,540 foreigners at the terminal site on Lelu Island.
The reliance on foreign expertise highlights the complexity of constructing the $11.4-billion export plant in northwestern British Columbia, of which $8-billion would be spent on imported goods and services.
"We will hire Canadians if Canadians are available to do the job. It's obviously easier to bring in somebody local into the job than to bring foreign workers in," Pacific NorthWest LNG president Michael Culbert said in an interview Tuesday. "It comes down to the ability to source Canadian labour, both the numbers that we need and the expertise that we need."
The proposal to rely heavily on help from overseas, especially to assemble LNG modules imported from Asia, is a sensitive topic after Ottawa moved earlier this year to curb abuses of the temporary foreign worker program by tightening the rules. But Mr. Culbert said hiring foreign labour isn't an exercise in cost savings for the Petronas-led project.
"Canadians are expected to account for 70 per cent of the on-site work force for the first three years of construction. However, because of competition for labour from other projects and the specialized skills required for the later stages of construction, Canadians would only account for 30 per cent of the on-site work force for the remaining two years of construction," according to a report last month by the B.C. Environmental Assessment Office that cited statistics supplied by Pacific NorthWest LNG.
Pacific NorthWest LNG, which last week announced a delay to its final investment decision, is seeking ways to reduce costs for the terminal. Petronas and its four Asian partners are scrutinizing the economics of the terminal and related construction projects, looking at international engineering costs, subcontractors and two natural gas pipelines to be built by TransCanada Corp. – the $5-billion Prince Rupert Gas Transmission plan and the $1.7-billion North Montney Mainline.
All in, the venture's total cost could surpass $36-billion. Mr. Culbert stressed that when examining the entire venture from wellhead to terminal, Canadian content is high.
"When you look at the magnitude of jobs that we're creating with the whole package, it's quite staggering," he said, adding that in northeastern B.C., where Petronas unit Progress Energy is drilling up a storm, more than 6,000 Canadians have jobs on Progress-commissioned rigs and with associated suppliers.
If Pacific NorthWest LNG approves the Lelu Island terminal, finding enough qualified Canadians won't be easy, Mr. Culbert said. About 500 workers would be required in the second half of 2015, then 2,500 people in 2016 as the building phase kicks off.
At the peak of the five-year construction period, from 2017 to 2018, at least 4,000 workers would be needed to build the export terminal, before tapering off to 1,500 people to complete the project in 2019.
A new report by the Skeena Watershed Conservation Coalition and consulting firm Sharp Six said that if Pacific NorthWest LNG embarks on construction in 2015, it will be competing against Alberta's oil sands for workers.
Rival projects also expected to compete for labour in northwest B.C. include two planned for Kitimat – Shell Canada Energy-led LNG Canada and Chevron Corp.-led Kitimat LNG. Australian media reported that Woodside Petroleum Ltd. of Australia is interested in acquiring Apache Corp.'s 50-per-cent stake in Kitimat LNG, a move that would provide a boost to the Chevron-led joint venture.
Pacific NorthWest LNG might take until the spring of 2015 to decide whether to forge ahead, analysts say.