Blog: BC LNG: slow progress, but progress

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The graphics at the bottom of this page caused us to ask cynically on social media: “Would you say Canada has been a little slow off the mark in the LNG race?

A check with the U.S. Federal Energy Regulatory Commission (FERC) shows the U.S. has seven LNG export terminals in operation today (though one is temporarily shut down for repairs), plus three more being built, nine approved but not yet under construction, and another five going through FERC reviews.

The U.S. Energy Information Administration reported that in the first half of the year the United States surpassed Australia and Qatar to become the world’s top LNG exporter.

And the U.S. is also eyeing Mexican LNG projects, and one in Alaska, as a way of exporting LNG to Asia, in competition with B.C.

So where is Canada?

At one point, five years ago, there were as many as 20 LNG projects planned, proposed or talked about for BC.

Two major ones that actually began work on their plans were later shelved: the $36-billion Pacific NorthWest LNG project (which was scrapped that year) and the $30-billion Kitimat LNG project, finally dropped in 2021 by Chevron Canada and its 50/50 partner, Woodside Energy of Australia.

Some of the other projects in BC that were shelved (or have “gone inactive”) included the Malahat LNG project and Kwispaa LNG on Vancouver Island, both from Vancouver-based Steelhead LNG, and both with First Nations involvement.

The Malahat project, in partnership with the Malahat Nation, was dropped in 2017. Steelhead at that point continued to work on the Kwispaa project, with the Huu-ay-aht First Nations. But the Huu-ay-aht announced in 2019 that Steelhead had pulled out. (Steelhead insisted that it was “a refocusing or a timeout” but no more has been heard from it since then.)

And today?

There’s LNG Canada, of course, under construction at Kitimat, as the largest private investment in Canadian history at more than $40 billion.

It plans to begin exporting LNG in 2025. Its latest newsletter notes: “With our project more than 60% complete overall, we’re moving swiftly and safely towards operations, and to supplying the world with lower carbon, made-in-B.C. LNG.”

Phase One of the project will have two LNG processing units ( “trains”) that can  produce in total around 14 million tonnes of LNG a year.

But as U.S. suppliers step up LNG shipments to a hungry Europe, Shell, the lead partner in LNG Canada, is studying the feasibility of moving forward with the project’s second phase, to supply more LNG to growing markets in Asia. That would expand it to four trains, and total production of some 26 million tonnes of LNG a year.

Meanwhile, the 670-km Coastal GasLink pipeline that will feed natural gas to LNG Canada is “approaching 65 per cent over-all completion.”  And more than 6,000 women and men expected to work along Coastal GasLink’s route at its peak this summer.

Woodfibre LNG on Howe Sound is aiming to start major construction in 2023, and to reach substantial completion in 2027. It could produce approximately 2.1 million metric tonnes of LNG a year, with an investment of $1.6-$1.8 billion.

While other projects have not disclosed details of specific overseas sales, Woodfibre LNG has listed two deals signed with BP Gas Marketing, covering a total of 1.5 million tonnes of LNG a year for 15 years. That’s more than 70% of its planned output.

Fortis BC aims for 2026 to complete expansion of its current Tilbury LNG plant in Delta, to produce 7,700 tonnes of LNG per day. It will serve domestic gas customers, and ships based in BC,  and visiting BC, that are fuelled by LNG.

The associated Tilbury Pacific LNG jetty project from Fortis LNG and Seaspan will draw LNG from the Tilbury plant, then fuel local ships and ocean-going vessels that are switching to LNG. And it can serve an LNG export market for Asian buyers.

As Fortis looks at exporting BC LNG overseas in containers, so, too, does Port Edward LNG, a small-scale project (300,000 tonnes a year) near Prince Rupert. It also sees container shipments to remote Indigenous communities and others that want to switch to LNG, in place of diesel, to generate power. (Which is what Alberta-based Ferus LNG is doing, as far as Inuvik NT.)

Then there are two major projects proposed by First Nations in BC:

  • Cedar LNG is owned and led by the Haisla Nation, in partnership with Pembina Pipeline, proposes to build and operate a floating LNG plant on Haisla land on the Douglas Channel near Kitimat. It would produce about 3 million tonnes a year. The project is undergoing government reviews, and hopes for a Final Investment Decision and a start on construction in 2023.
  • Ksi Lisims LNG would also be a floating operation — and a big one at 12 million tonnes a year. It’s owned by the Nisga’a Nation in partnership with Rockies LNG and Western LNG. Depending on the timing of regulatory processes, Ksi Lisims says construction could begin in 2024 with the site operational in late 2027 or 2028.

And with Europe pressing for more and more LNG, to replace Russian gas, there’s the question of exporting LNG to Europe from Canada’s east coast.

The federal government has suggested the Repsol LNG import plant in New Brunswick could be converted to an export plant. That would take some three years.

If Pieridae Energy goes ahead in Nova Scotia it might be able to start production in 2027. The LNG Newfoundland and Labrador project, which has a First Nations partner, hopes for 2029 or possibly 2028.

For BC, it’s a far cry from 20 projects, and it’s indeed a long way behind the U.S. But, even if disappointingly slow off the mark, it’s progress.

And anticipated demand from Asian and other economies suggests that there will indeed be room, for decades, for all the Canadian projects above.

(Posted here 27 July 2022)

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