LNG projects making progress in BC

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We sometimes look back with a told-you-so smile at the solemn declarations of former BC Green Party leader Andrew Weaver about LNG in BC:

  • “LNG isn’t going to happen; I said it cannot happen, because there’s no market for it.” (2013)
  • “I’ve been saying for four years, there is no market for LNG.” (2017).
  • “The reason why we have no LNG industry here in British Columbia is that the market simply doesn’t support it.” (2017)

Let’s catch up on this “no market” as LNG Canada and Coastal GasLink work away on the $40-billion LNG Canada export project, as Fortis BC expands LNG production, and as Woodfibre LNG inches closer to a launch.

Speaking of Woodfibre LNG: It has been in the news as it now has pre-sold over 70% of its planned production to BP Gas Marketing.

The current world market, happily beginning to recover from the impact of the pandemic, is around 360 million tonnes of LNG a year.

The International Energy Agency, whose forecasts for oil demand have eased over the last year, still sees a 30% rise in global natural-gas demand by 2040, concentrated in South and East Asia.

LNG producer Shell (a 40% partner in LNG Canada) sees more: It envisages the global market almost doubling (up 94.4%) by 2040.

Shell said in its 2021 outlook: “Global LNG demand is expected to reach 700 million tonnes by 2040, according to forecasts, as demand for natural gas continues to grow strongly in Asia and gains further traction in powering hard-to-electrify sectors. As a result, more supply investment will be needed to avoid the estimated supply demand gap in the middle of the current decade.”

The Gas Exporting Countries Forum predicts Asia-Pacific demand will hit 125.5 million tonnes a year by 2050.

And the International Gas Union notes that the world market now is 60 years old. That has meant the safe delivery, by sea, of almost 100,000 LNG cargoes from 20 LNG exporting countries to 40 importing countries.

We look forward to making that 21 exporting countries, and Peter Zebedee, CEO of LNG Canada, says: “LNG Canada proves that B.C. and Canada can deliver competitive energy projects. The project puts Canada on the global map of LNG-exporting countries.”

So there is a market, Weaver notwithstanding.

Now, what is BC doing to get in the game and supply that demand?

Petronas, a 25% partner in LNG Canada, has signed charter agreements for three new LNG carriers with South Korea’s Hyundai LNG Shipping. These are primarily for use with the LNG Canada project.

They will be among the most energy-efficient LNG carriers ever built, and powered by LNG.

Petronas is scheduled to receive the three carriers from the second quarter of 2024. They have already been ordered by Hyundai LNG Shipping from South Korean shipbuilder Hyundai Heavy Industries.

“With these vessels, Petronas has grown its global LNG fleet from 24 to 27, covering small, medium, and large sized vessels,” Petronas said.

They will be assisted in our waters by high-tech tugs from the Haisla Nation and North Vancouver-based Seaspan ULC.

LNG Canada contractor JFJV Kitimat also announced at the end of April that it had driven the last of 6,483 piles in Phase One of the plant project at Kitimat. Piling continues today at the water intake project on the Kitimat River.

Meanwhile, Coastal GasLink has completed more than 26% of its construction work for the 670-km pipeline, and looks to ramp up its work and pipe-laying through the summer. It has received and delivered all the pipe needed.

Learn more about the project via Coastal GasLink’s online Open House.

Between them, they’re on track to have LNG Canada send off its first shipment of LNG in 2025.

Update: When we wrote this blog on 11 May 2021, we still were awaiting word on the fate of the Kitimat LNG project. Chevron Canada, a 50% partner had stopped funding it, but Australia’s Woodside, with the other 50%, had reiterated its commitment to the project and Indigenous partners. However, on 17 May 2021, Woodside announced that it its 50% share was also for sale.

Meanwhile, the Haisla Nation plans its own floating LNG project and export terminal, down the road, and the Nisga’a nation is looking into such a project.

All in all, the LNG projects in progress in BC have already brought many benefits to First Nations, in both jobs and revenue.

But we at the First Nations LNG Alliance now are looking in depth at the extent of these  benefits, and at how the LNG sector in BC has performed in distributing such benefits,  and business opportunities, to First Nations.

What experiences have First Nations had in all this? What are the success stories — and what are the challenges? What’s working? And what could be done better?

Our examination starts with our survey of nations and people along the route of the Coastal GasLink pipeline and around the LNG Canada project. Here’s where to take the survey. You could win a $100 gift card for doing that.

(Posted here 11 May 2021)

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