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Shell advances LNG plans
Gary Park Petroleum News
Shell Canada, the 50 percent stakeholder in the LNG Canada project, is assembling plans to develop massive gas fields in northeastern British Columbia as it moves closer to an expected final investment decision before the end of 2018.
At the forefront is the Groundbirch gas field that is jointly owned by Shell at 80 percent and PetroChina at 20 percent, which is estimated to hold 35 years of supplies based on current production levels.
In a back-up role is the Cutbank Ridge play, controlled 60 percent by Encana and 40 percent by Japan’s Mitsubishi.
In addition to Shell’s 50 percent stake in the actual C$40 billion LNG Canada venture, consortium partners are PetroChina at 20 percent and South Korea’s Kogas and Mitsubishi at 15 percent each.
Shell Canada President Michael Crothers told the Globe and Mail that LNG Canada’s first phase will rely mostly on gas feedstock from Groundbirch and Cutbank Ridge, along with a smaller contribution from Kogas.
The plans call for two LNG trains capable of delivering 6.5 million metric tons a year to Asia once construction is completed in 2023.
Crothers noted that his company is a “big gas trader” that is able to access a wide range of contracts from individual producers, as well as the wider market.
First Nations interest While the consortium pursues its own agenda, it has been bolstered by British Columbia First Nations, which are eager to tap into an estimated 10,000 construction jobs and 950 permanent jobs from the gas fields across the province to the terminal facility at Kitimat on the northern B.C. coast.
Haisla Nation Chief Councilor Crystal Smith, whose community is the major land-holder in the Kitimat region, fired back at the Sierra Club, which has warned of the negative impacts an LNG industry would have on tourism.
She invited the club and B.C. Green Party leader Andrew Weaver to spend time with the many First Nations who support LNG development.
Last year, the B.C. government reported 64 agreements had been signed with 29 First Nations, representing about 90 percent of those along the pipeline routes for LNG projects.
Karen Ogen-Toews, chief executive officer of the First Nations LNG Alliance, said the agreements range from site clearing to supplying work camps and open the way to skills training, new business development and new revenue streams, creating “own-source revenue” for the aboriginal communities.
Smith said her people take exception when those who don’t have to live with the social issues confronting indigenous residents campaign against resource development.
She noted that the Haisla have already had a “taste of an economic boom” from the C$6 billion expansion of the Rio Tinto Alcan smelter at Kitimat through “meaningful, well-paying jobs.”
- GARY PARK
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