LNG Canada’s terminal in British Columbia enters its maximum construction phase

A module arrives aboard a ship in Kitimat, British Columbia, on March 10. The module must be installed at LNG Canada’s export terminal in Kitimat.Courtesy of LNG Canada

LNG Canada is preparing for the peak phase of construction of its massive terminal in British Columbia, reiterating its goal to begin exporting liquefied natural gas to Asia in 2025.

LNG Canada, led by Shell PLC SHEL-N, is the only Canadian project under construction that would export the fuel aboard ocean-going tankers. In the United States, on the other hand, exports of natural gas in liquid form began six years ago and seven major terminals are already in operation.

At the peak of construction, from this year through 2024, LNG Canada will require up to 7,500 rotational workers, with room for 4,500 people at any one time at the on-site accommodation center in Kitimat, in British Columbia.

Peter Zebedee, CEO of LNG Canada, said the $18 billion terminal is nearly 60% complete and preparing for the busiest phase. “This is a very important year for us, with a pace of construction never seen before,” he said in a statement.

JGC Fluor BC LNG JV, an engineering joint venture between JGC Corp. and Fluor Corp., is the prime contractor for LNG Canada. Construction of the terminal began in October 2018 at the Kitimat industrial site located on the traditional territory of the Haisla Nation.

Engineering involves both Canadian and global supply chains. Huge modules are being built in the fabrication yard of China Offshore Oil Engineering Co. Ltd. in Qingdao, China. A 10+ story module arrived in Kitimat last Thursday.

Smaller modules are supplied by a fabrication yard in Zhuhai, China, operated by a joint venture between Fluor and China National Offshore Oil Corp.

“We remain committed to shipping our first cargo by the middle of this decade,” LNG Canada said in a statement, noting that it is focused on delivering “BC-made LNG to needy Asian markets.” need”.

Various equipment will be installed at the Kitimat site, including the 10-story module that will connect to the Coastal GasLink pipeline system that will be operated by TC Energy Corp.

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Last week, TC Energy TRP-T entered into option agreements to sell a 10% interest in the disputed Coastal GasLink pipeline to two groups of elected First Nations along the pipeline route. Coastal GasLink is being built to transport natural gas from northeast British Columbia to Kitimat.

Coastal GasLink has been the target of fierce opposition from a group of Wet’suwet’en Nation hereditary chiefs and their supporters, who say the pipeline project does not have the consent of those chiefs. hereditary.

Of the 24 Canadian LNG proposals tracked by federal authorities five years ago, 18 were in British Columbia, all focused on exports to Asia. There were three LNG proposals in Nova Scotia, two in Quebec and one in New Brunswick.

Only four export proposals with LNG carriers remain active in British Columbia: Woodfibre LNG, Cedar LNG, Ksi Lisims LNG and plans to expand a terminal called Tilbury LNG, which currently focuses on production for domestic use and storage.

In the United States, Cheniere Energy Inc.’s Sabine Pass LNG project opened in February 2016, making its first delivery in Brazil.

There are now seven major LNG export terminals in the United States, after the Calcasieu Pass project in Louisiana began exporting last month, with its first shipment to Asia. Golden Pass LNG in Texas is targeting a start date of 2024.

Canada’s LNG exports to Asia would indirectly help Europe, as it would free up LNG supplies elsewhere in the world for re-routing to Europe.

Following Russia’s invasion of Ukraine nearly three weeks ago, natural gas prices in Europe have been volatile, hitting a record high last week before falling as fears subsided over the severity of fuel shortages. Russia supplied around 34% of Europe’s total natural gas consumption in 2020, accounting for 42% of Europe’s total imports of the fuel, according to industry analysts.

In Europe, there are constraints on the ability to accept LNG shipments. Germany, for example, does not have LNG import terminals, but plans to build its first two sites as part of broader efforts to reduce dependence on Russian natural gas flowing to Europe.

Since 2006, ambitious plans to ship LNG to Europe from Newfoundland and Labrador, Quebec, Nova Scotia and New Brunswick have either been canceled outright or suspended indefinitely.

Last summer, Goldboro LNG of Pieridae Energy Ltd. in Nova Scotia drastically scaled back its plans, moving to a proposed floating facility instead of a large terminal that would have been built on land.

Another proposal, LNG Newfoundland and Labrador Ltd., is in the early planning stages with hopes of starting exports in 2030.

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