Kitimat LNG project revived

Gary Park

for Petroleum News

Chevron Canada and its Australian partner Woodside have made sweeping promises to regulators in their latest bid to revive the Kitimat LNG project.

In a 186-page filing to British Columbia and Canadian environmental agencies, they have promised their KLNG plant would “outperform current best-in-class global LNG plants and the more stringent government of B.C.’s LNG intensity benchmark” by utilizing electric-motor-drive technology for all processes.

Their pledge is to operate at a level below British Columbia’s limit for “emissions intensity” of 0.16 carbon-dioxide equivalent metric tons for each metric ton of LNG produced.

The partners said they hope to make a final investment decision in 2023, and target completion of the first phase by 2029.

The KLNG proponents applied to Canada’s National Energy Board in April to almost double their LNG exports to 18 million metric tons a year from 10 million metric tons and double their license to 40 years from the 20 years previously granted - a permit that expires at the end of 2019.

The first phase of the revised KLNG plan would have two trains of 6 million metric tons each for shipment to Asia.

Work on the liquefaction site and tanker terminal has already involved spending estimated at hundreds of millions of dollars at Kitimat on the northern B.C. coast, but construction has been stalled for two years since the left-wing New Democratic Party government of B.C. set new targets for greenhouse gas emissions, regardless of the earlier approval of the Royal Dutch Shell-led LNG Canada project.

LNG Canada, backed by a C$225 million federal contribution towards gas turbines, is scheduled to start exports in 2025.

KLNG has gone through a series of ownership shifts since it was launched a decade ago, including Woodside’s decision in 2015 to acquire a 50% stake from Apache.

The partnership has proposed to build Coastal GasLink to deliver feedstock gas to the Kitimat liquefaction plant at a cost of C$6.2 billion but faces a campaign by seven Wet’suwet’en chiefs who want to block the pipeline.

However, Canada’s Finance Minister Bill Morneau issued a warning in late June that any anti-pipeline protesters should follow a B.C. Supreme Court injunction preventing pipeline workers from being blockaded.

- GARY PARK