(From Natural Gas World at the World Gas Conference)
Nearly four years ago, five of the world’s most well-known players on the global natural gas stage sanctioned Canada’s first world-scale LNG export project – the 14mn mt/yr first phase of LNG Canada.
Backed by names like global major Shell, Malaysia’s PETRONAS, PetroChina, Korea Gas and Japan’s Mitsubishi, the face of LNG in Canada could easily have been an executive from one of these multinational companies or from the consortium they formed to advance the $40bn project, the largest private investment in Canadian history.
But in the days, weeks and months following the LNG Canada final investment decision (FID) in October 2018, one face emerged from the crowd of people impacted by the decision – that of Crystal Smith, chief councillor of Haisla Nation, on whose traditional territory LNG Canada will be built.
Smith’s first exposure to the world of LNG came more than a decade ago, when she was assistant to then-chief councillor Ellis Ross. Even then, she told a World Gas Conference WGC2022 reception at the Canada Pavilion, she recognised the potential of LNG in BC, and what it could mean for her nation, and other First Nations in BC and across Canada.
“The Haisla Nation has studied the LNG industry for more than 10 years, and we recognised early on that there was value in us joining the global stage to ensure our voice and our values are contributing to a better future,” she said.
Initially, Haisla Nation joined that global stage by providing support and traditional knowledge to the LNG Canada consortium. In turn, that collaboration led to economic benefits flowing not only to Haisla Nation, but to other First Nations in BC, notably 20 nations across whose traditional territories the Coastal GasLink pipeline, which will supply feed gas to the liquefaction terminal, is being built.
But even before LNG Canada was sanctioned, Haisla Nation had higher aspirations: in 2016 Cedar 1 LNG Export received a 25-year authorisation from Canadian regulators to export up to 8.55bn m3/year of natural gas as LNG for 25 years, and three years later filed a detailed project description with provincial and federal regulators for Cedar LNG, a floating liquefaction and storage facility and marine export terminal near Kitimat, BC – just up the Douglas Channel from the site of LNG Canada.
The proposed facility – which will be owned equally by Haisla Nation and infra-structure developer Pembina Pipeline – is being designed by Korea’s Samsung Heavy Industries and global engineering company Black & Veatch. It will process and liquefy, using renewable energy, 400-500mn ft3/ day of natural gas to produce 3-4mn mt/yr of LNG.
“Haisla has made important and intentional choices for Cedar LNG, to make it the cleanest project we can, because we understand the danger in climate change happening today,” Smith said. “Our values have driven Samsung and Black & Veatch to design an innovative and industry-lead-ing facility with a footprint that fits the environment.”
While Cedar LNG represents an important opportunity for economic reconciliation, Smith recognises that success with one project, or others that are being considered, can’t happen without collaboration.
“I am here because I want to do what is right for my community, but I also recognise how much more we can achieve when industry, government, customers and society work together,” she said.
Cedar LNG, she said, checks all the boxes for Haisla Nation: it advances resource development, while minimising environmental impacts; it allows Haisla Nation to take control of its future, and partner with industry, government and other communities; it supports economic reconciliation while respect Indigenous traditions, cultures and way of life.
“By transforming how resource development takes place, I believe we can also transform the experience for every Indigenous person in my community, across Canada and across the globe,” Smith said.
“I am committed to proving that prosperous economic development can happen hand in hand with respecting indigenous values and providing an important solution to meet our global climate-change goals.”
In Cedar LNG, Pembina Pipeline has found a liquefied natural gas project it believes will succeed, as opposed to its failed Jordan Cove LNG project, which Pembina inherited when it acquired US midstream company Verasen in 2017 and which was laid to rest late last year following repeated failures to acquire key state permits.
Stuart Taylor, senior vice president, marketing and new ventures with Pembina, says he came to WGC2022 for much of the same reasons that brought Crystal Smith:
a desire to reconnect, after two years of virtual meetings, with some of the groups that will be instrumental to the success of Cedar LNG.
“We wanted a chance to bring our partner, the Haisla Nation, here and show that Cedar is progressing, how important it is to the Haisla Nation from an economic development perspective, and to get the message out that the Cedar LNG project is a great project,” he told Natural Gas World (NGW). “It has so many great characteristics: we have pipeline capacity, we have support of the Nation itself, we have the provincial government, we have federal support.”
What it doesn’t have yet is a customer, and that was another key reason for Taylor’s trip to WGC2022.
“We need to commercialise, and that was a large part of coming here, to reach out to offtakers and potential customers of Cedar LNG, tell them where we’re at, what our timeline is, and where we think we are going to be going,” he said.
“And we were very well received. We’ve had some great conversations. We are working very fast from an LNG speed perspective. The project does attract interest – the Canadian aspect, the First Nation aspect, the energy security aspect, which is very important today.”
Cedar LNG and Pembina Pipeline aren’t the only companies active at WGC2022.
AltaGas, a Calgary-based midstream company active in gas distribution in the US and liquefied petroleum gas (LPG) – propane and butane, primarily – from export terminals in Prince Rupert, BC and Ferndale, Washington, made the trip to reconnect with valued clients and partners from Korea and elsewhere, said Shaheen Amirali, executive vice president and chief external affairs and sustainability officer.
“It is an opportunity to engage and build relationships with all of our key stakeholders – from government to our producer partners to our Korean customers – in one forum,” she told NGW.
“What we do is more than the products we move – it is about shared values and vision, engaging to listen and understand and build trust. It is the power of recognizing that we can accomplish much more together and learn from our counterparts around the world.”
Virtually all of the LPG shipped by AltaGas out of its Ferndale terminal goes to Korea, to E1, which developed the country’s first LPG import terminal, or to SK Gas, which is building the world’s first LNG/ LPG combined cycle power plant in Ulsan, southeast of Daegu.
“The Korean market wants to see both products – propane and butane – so it has been the right place to go, which is one reason we are here,” said Randy Toone, president of AltaGas Midstream. “The other is that the Korean customer wants that face-to-face connection – they want to get to know you, and that is very important to them and to future business.”
Toone noted that while the World Gas Conference is big on natural gas and big on ammonia, LPG has a long history in Korea and Japan and throughout Asia. And LPG is Canada’s only entrée into the gaseous Asian energy market.
“Canada can do LPG exports, as we’ve proved, but Canada hasn’t done LNG exports yet,” he said. “LNG Canada, as it gets going, will make Canada a proven source of LNG, and will only grow; as LNG grows, LPG will grow.”
But Canada’s low-carbon gas export opportunities aren’t confined to the west coast.
In the Jeanne d’Arc Basin offshore Newfoundland & Labrador, LNG Newfoundland & Labrador (LNG-NL) has identified about 8 trillion ft3 of stranded natural gas from non- fracked sources that can be liquified using clean hydropower and shipped to European markets at about a $0.50/mn BTU shipping-cost advantage over Gulf Coast LNG.
“It’s now or never if we want to monetize this vast resource of stranded natural gas
in the Jeanne d’Arc Basin,” LNG-NL CEO Leo Power told NGW. “But the real, untold story about the potential for the east coast offshore with respect to natural gas is recent 3D seismic which shows that we have the potential to discover another 224 trillion ft3 offshore Newfoundland – there is enor-mous potential for a massive LNG export opportunity.”
The first phase of development would tap the 8 trillion ft3 of associated gas that is produced along with light sweet crude, strip the condensate from it and deliver it through a 600 km subsea pipeline to Grassy Point, in ice-free Placentia Bay, on Newfoundland’s south coast.
There, 400mn ft3/day of stranded gas would yield about 2.5mn mt/yr of LNG using on a floating liquefaction and storage facility moored at the site of a previous- ly-approved LNG transshipment terminal.
The entire operation, Power said, would need about 100 MW of clean hydropower, which the provincial power utility has confirmed would be available when needed – around 2030 for the first exports from LNG-NL.
Later phases of development would capture CO2 emissions from the liquefaction process and ship it back to the Jeanne d’Arc Basin where it would be permanently sequestered in depleted reservoirs.
“We have a great story to tell, and we’re here at the World Gas Conference
in Daegu to tell this story about the east coast of Canada and the potential to export low-carbon energy to Europe and other high-demand markets,” Power said.
- Original story as posted by Natural Gas World at the World Gas Conference: Scroll down to Page 10 at http://ow.ly/2k1050JpXTe
(Posted here 05 June 2022)
