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Shell's planned natural gas terminal on the B.C. coast is substantially larger than the planned Kitimat project.

Graham Hughes/THE CANADIAN PRESS/Graham Hughes/THE CANADIAN PRESS

A group of major international energy partners led by Royal Dutch Shell PLC is contemplating an LNG export terminal for the British Columbia coast that is substantially larger than a rival's project that could soon begin construction.

Shell, which has teamed with Korea Gas Corp., China National Petroleum Co. and Mitsubishi Corp., is looking to load 1.8 billion cubic feet a day of natural gas onto tankers bound for Asian markets, officials with Spectra Energy Corp. revealed Tuesday.

Shell has publicly acknowledged that it is studying LNG options, and recently purchased marine and dock facilities from Cenovus Energy Corp. , including a former Methanex plant that was used to import hydrocarbons. It has not, however, disclosed the size of its proposed project.

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The potential size of the terminal was described on Tuesday by Allen Capps, vice-president of business development storage and transportation with Union Gas, an affiliate of Spectra Energy.

Spectra has details on LNG plans because it runs a major network of natural gas pipelines in B.C., and is one of several pipeline companies, including Enbridge Inc. , vying to bring big new volumes of gas to the province's coast. That will require new pipeline capacity, because existing lines are far too small to accommodate the volume of exports that are envisioned.

In a presentation to the Industrial Gas Users Association, Mr. Capps said Shell is examining plans for a 3.6 billion cubic feet a day project, which would be among the largest under consideration in the world. Spectra spokesman Peter Murchland later said the correct figure is 1.8 billion. That compares to the 1.4-billion cubic feet a day proposed by Kitimat LNG, whose backers are Apache Corp. , EOG Resources Inc. and Encana Corp.

Kitimat LNG intends to build a 700-million cubic foot facility first, at a cost greater than $5-billion, but has received an export licence that allows it to double that. The partnership intends to make a final investment decision early next year, but is already spending several hundred million dollars to terrace the sloped site of the intended terminal, the first step in construction.

In a statement, Mr. Murchland said Spectra is playing "an integral role in the ongoing dialogue related to LNG export opportunities to markets in the Asia-Pacific region."

He added: "We are currently collaborating with several LNG export project proponents – representing industry and government – to be a pipeline partner, and transmission aggregator, for what we believe will be one of the largest natural gas infrastructure projects in Canada."

Shell spokesman Stephen Doolan would say only that Shell is "exploring the potential of an LNG project in British Columbia."

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"Once the project has matured, we will be able to provide more information on size and timelines."

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