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Andy Calitz is the most senior Shell employee with LNG Canada.Todd Korol/The Globe and Mail

The most senior Shell employee with LNG Canada is touting the unity of its partnership with large natural gas buyers in a plan to build a multibillion-dollar liquefied natural gas project in British Columbia as an advantage over competing proposals.

That leaves possible increases in taxes and fees, as well as the costs of labour and materials, as the primary concerns ahead of a final decision.

Shell's partners in the LNG Canada consortium, which plans a coastal plant and export terminal at Kitimat, B.C., are among the largest buyers of the fuel in Asia, so setting prices for long-term supply contracts will not be an issue as they develop the venture over the next seven years, said Andy Calitz, a veteran of Shell's LNG business in Russia and Australia, where the European oil major has massive facilities.

"You can hear from me a quiet confidence" that supply contract negotiations will not impede a final investment decision on the Kitimat project, Mr. Calitz said in an interview at Shell Canada's Calgary headquarters.

In fact, the players do not intend to trumpet any supply deals, which makes the venture different from Shell's previous projects, such as the huge Sakhalin-2 development in Russia and Gorgon in Western Australia, said Mr. Calitz, who is the Vancouver-based vice-president of LNG Canada.

That is not the case for all the players seeking to build up a new LNG industry in the region. At least one of the proposed projects, the Chevron Corp.-backed Kitimat LNG, has experienced lengthy delays in reaching a final investment decision, with officials pointing to difficulty in finding buyers willing to sign lucrative contracts that link the price of the product to the price of oil.

Such oil-indexed pricing is common overseas, and has helped draw the interest of U.S. and Canadian producers who have struggled with the much lower value of North American gas. However, some Asian buyers have said they are eager to buy supplies indexed to the U.S. gas prices.

Shell is one of several major players seeking to transform vast Western Canadian natural gas reserves into a lucrative trans-ocean business. The company has teamed up with Korea Gas Corp. (Kogas), Mitsubishi Corp.and PetroChina Co. Ltd.

Kogas is one of the world's largest LNG buyers, Mitsubishi one of the top traders, and PetroChina its country's dominant energy company and largest natural gas producer, all of which add heft to the proposal and eliminates the need to hunt for LNG contracts, Mr. Calitz said. The partners plan to decide by 2015 whether to go ahead with the 1.7-billion-cubic-feet-a-day venture, with startup targeted for the end of the decade.

Australia, in particular, has seen massive cost overruns at LNG developments, something that will be a concern for Shell and its partners. However, Mr. Calitz said the group plans to construct large parts of the project away from the site and ship large pre-built modules to Kitimat as a way to reduce the number of construction workers needed there.

Exports to higher-priced markets would allow accelerated development of Canada's massive shale gas reserves, supporters say.

Mr. Calitz lauded moves by the federal and B.C. governments to support the nascent industry, saying that they add credibility to the project proposals in Asian markets. Such support includes the National Energy Board's granting of gas export licences.

The B.C. government has been an enthusiastic promoter of the LNG industry, claiming that extraction of the fuel could help eliminate provincial debt. In June, the provincial government said another LNG project under development by Malaysia's Petronas could result in a total investment of nearly $20-billion.

But the industry is concerned about a prospective move by B.C. to bring in new taxes and levies, which the government said in February could raise roughly $30-billion over 30 years in additional revenue.

In June, Tokyo Electric Power Co. Inc., the world's largest LNG importer, warned that a new tax on gas exports could slow the development of the industry.

"We are supporting the B.C. government as they work towards ensuring that the province is globally competitive including from an LNG taxation perspective so that projects like LNG Canada can go ahead," Mr. Calitz said.

A competitive threat is also growing in the United States. Last week, Washington approved a third U.S. LNG project, a $2-billion (U.S.) facility on the Louisiana Gulf Coast. Several other export applications are waiting approval, pointing to a race against the Canadian developments to feed the Asian market.

Mr. Calitz said he does not expect all Canadian and U.S. proposals to proceed, however, given high capital costs and the need for long-term supply arrangements. That will leave plenty of room for experienced developers, he said.

"We have already seen the LNG market doubling in size during the last decade and we [in Shell] expect the market to double again between now and 2020," he said.

"Project sponsors will all want to see long-term offtake commitment to underpin their new LNG investments and customers are looking for reliable, well-financed, long-term suppliers. Coupled with long lead times, local environmental factors, societal acceptance and fiscal regimes will all play a huge role in which projects reach [investment decisions]."