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Shell gains ‘crucial’ facility permit Kitimat liquefaction, tanker terminal site receives facility permit from British Columbia Oil and Gas Commission; 30 conditions GARY PARK For Petroleum News
The Shell-led LNG Canada project has gained a key permit allowing it to start preparation work at the project’s liquefaction and tanker terminal site at Kitimat, on the northern British Columbia coast.
Although final corporate investment decision is still awaited, LNG Canada is the first in the long list of LNG ventures to receive a facility permit from the British Columbia Oil and Gas Commission.
The approval outlines the requirements for design, construction and operation of the planned facility.
A spokeswoman for LNG Canada said it is a “crucial” element of the project, following an environmental green light from federal and provincial authorities last June.
She said the partnership is comfortable with all 30 conditions included in the permit, including those on noise management and emergency response plans.
LNG Canada carries an estimated price tag of US$40 billion - far greater than the C$36 billion attached to the Petronas-led Pacific NorthWest LNG, which is also edging closer to sanctioning of its initial phase of 12 million metric tons a year- and includes two processing trains, each able to produce 6.5 million metric tons of LNG annually, with provision for another two trains in the future.
The joint venture company consists of Shell and affiliates of PetroChina, Korea Gas and Mitsubishi.
First Nations endorsement sought The spokeswoman said the project is still seeking a permit from Fisheries and Oceans Canada, along with assurances that the project is endorsed by First Nations, is being built cost effectively and that the timing is ripe for such a facility.
She said the company has acknowledged from the outset the importance of partnering with the Haisla Nation which has generated a strong, open working relationship.
The official said that despite the global decline in energy markets that is not good news for British Columbia’s fledgling LNG industry, LNG Canada is “very enthusiastic as well as absolutely committed to the fact that we need to have a facility like this to export our gas ... otherwise we wouldn’t pursue it as ambitiously as we are.”
Of the 20 proposals launched in British Columbia, four have received environmental approval from the province’s Oil and Gas Commission and two have received a go-ahead from the Canadian Environmental Assessment Authority, with federal decisions pending on Pacific NorthWest and the Woodfibre LNG project in Howe South north of Vancouver.
‘Remarkable’ progress cited British Columbia Natural Gas Development Minister Rich Coleman said the industry made “remarkable” progress last year and is poised to take even bolder steps this year.
“If you were to listen to the critics - the ‘scrooges’ of economic development - they would tell you that progress has stalled and the government should relinquish the B.C. Jobs Plan’s ambitious goals for growth and market diversification (which includes targets of 100,000 new related jobs and C$100 billion in revenue from LNG over 30 years),” he said.
“Those pessimists, to be frank, are short-sighted, reluctant to admit LNG is making progress, creating jobs and securing long-term prosperity.”
For the government of Premier Christy Clark, clear-cut progress is vital this year to improve its chances of re-election in mid-2017, especially given that her hopes for jobs and revenue, which she said could eliminate British Columbia’s debt and create a wealth fund, were the key to election victory in 2013.
But, aside from LNG, British Columbia has emerged as the leading economy among Canada’s 10 provinces, a position which the Conference Board of Canada is certain B.C. can retain for at least two more years.
Much of that robust outlook is tied to Clark’s singular hard-headed approach to managing budgets, unlike her New Democratic Party rival John Horgan, who seems ready to run budget deficits to stimulate infrastructure activity.
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