Skip to main content

British Columbia Premier Christy Clark speaks at an announcement about a joint venture agreement with Shell Canada Energy, PetroChina Corporation, Korea Gas Corporation and Mitsubishi Corporation to develop a proposed liquefied natural gas (LNG) export project, in Vancouver, B.C., on Wednesday April 30, 2014.

DARRYL DYCK/THE CANADIAN PRESS

A liquefied natural gas venture led by Royal Dutch Shell PLC has disclosed that it will cost up to $40-billion to develop a huge LNG export terminal in British Columbia.

Executives at LNG Canada are aiming to operate a massive plant with one of the largest production capacities among the 18 proposals announced so far in the province.

The Shell-led consortium released the estimated cost for the project as it filed its environment assessment application Friday to the B.C. Environmental Assessment Office. The sprawling property in Kitimat for the LNG facilities include a former Methanex Corp. plant site and a wharf formerly belonging to the Eurocan pulp and paper mill that West Fraser Timber Co. Ltd. closed in early 2010.

Story continues below advertisement

"The application includes details regarding our proposed project's economic and social benefits, environmental effects and mitigation measures to avoid or reduce those effects," LNG Canada external affairs director Susannah Pierce said during a conference call.

Royal Dutch Shell, through Shell Canada Energy, owns 50 per cent of LNG Canada. PetroChina Co. Ltd. holds a 20-per-cent stake while the other Asian partners are Japan's Mitsubishi Corp. and South Korea's Korea Gas Corp., which each have a 15-per-cent interest.

LNG Canada provided a wide range of $25-billion to $40-billion for the potential construction costs because labour expenses, plant component bills and other factors will have a major influence on the final price tag. The figures are based on the operation having two phases completed, with total capacity of up to 26 million tonnes annually of LNG.

In separate budgeting, TransCanada Corp. is slated to build the $4.7-billion Coastal GasLink pipeline from northeastern British Columbia to Kitimat.

Industry analysts expect that LNG Canada will make a final investment decision in 2016, which would clear the way for five years of construction and the first phase opening in 2021.

While Friday's environmental application is a key milestone, the proponents sounded a cautionary note by saying that "LNG Canada must ensure the project is economically viable." The proposal will need approval under a 180-day provincial review process and requires a separate nod from the Canadian Environmental Assessment Agency.

An average of 4,500 construction workers would be needed and then 350 to 450 plant employees for the first phase of operations, according to regulatory filings.

Story continues below advertisement

LNG Canada's project, located on an industrial site in Kitimat near Haisla Nation land, is aiming to perform better than standards for greenhouse gas emissions set by the B.C. government.

"The Haisla people strongly support this project but have always believed that it should be as green as possible," Haisla chief councillor Ellis Ross said in a statement.

The Shell-led group is considered by industry experts to be in second place in the race to export LNG from the West Coast to energy-thirsty customers in Asia. Pacific NorthWest LNG, led by Malaysia's Petronas, is seen to have the lead despite facing opposition from some environmentalists and a group of four First Nations.

Other major players on the West Coast include Chevron Corp.-led Kitimat LNG and BG Group PLC's Prince Rupert LNG.

LNG Canada will use natural gas turbines for the liquefaction process to super cool natural gas into a liquid while relying on electricity supplied by BC Hydro for its other power requirements.

The project could generate billions of dollars in revenue for the B.C. government and help bolster the tax base of municipal governments by millions of dollars annually, LNG Canada said.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter