LNG Canada moves ahead with BC project as China and Russia sign huge gas deal

The consortium consisting of Shell Canada Energy, PetroChina, the Korea Gas Corporation and Mitsubishi Corporation, known collectively as 
LNG Canada, announced that it has awarded a contract for front end engineering and design (FEED) for a proposed LNG export terminal at Kitimat, British Columbia. The FEED work will be done by CFSW LNG Constructors, a partnership between Japanese engineering firm Chiyoda Corp., United Kingdom-based engineers Foster Wheeler AG, Australia’s Worley Parsons and Italian oil-and-gas contractor Saipem. FEED activities are to begin on June 1.

The proposed LNG project includes the design, construction and operation of a gas liquefaction plant and facilities for the storage and export of liquefied natural gas (LNG). CFSW LNG Contstructors will be responsible for hiring the contractors to build the facilities, which will initially have a capacity to produce twelve million tonnes of LNG annually, with the option to expand to twice that capacity.

The cost of the Kitimat facilities has been variously reported at up to $12 billion.

The announcement from LNG Canada coincides with an international LNG conference hosted by the B.C. government Vancouver. It is the second year it has held such a conference intended to create interest in the industry.

It also coincides with the announcement that Russia and China have concluded a thirty-year, $400-billion gas deal, a fact that underscores the necessity for Canada to move quickly to get into this market. The first gas from Russia to China under the new deal is not expected to flow for four to six years, and China will reportedly pay an up-front amount of $20 billion to construct the pipelines that will carry the gas.

Analysts such as Michael Burt of the Conference Board of Canada have said repeatedly that Canada must act if it wants to have export markets for its natural gas. The director of the China Institute at the University of Alberta told CBC news that “it’s a race to the market” for gas exporters now. Besides China, Canada has potential customers in South Korea, Taiwan, and Japan.

Canada’s main advantage in trading with Asia is cost. European and Asian costs of natural gas are at least twice as high as here. North American gas has been averaging $4.50 per thousand cubic feet. The Chinese are reported to be paying $9.91 per thousand cubic feet for the Russian gas. Liquefied natural gas in Asia generally trades at $16 to $17.

Did you miss this?

Other Popular Stories

  • British cheer awarding of train contract to Bombardier
  • Ontario on track to lead country in employment, economic growth
  • SNC-Lavalin-China agreement could expand market for CANDUs
  • Expansion of wine and beer sales in Ontario grocery stores condemned by OPSEU
  • UN aviation body sets first CO2 emissions standard for world's airlines
  • Rapid growth of solar power a challenge for utilities
  • Héroux-Devtek subsidiary to provide landing gear for Boeing 777
  • Cars and aerospace boosted Canada's manufacturing sales in November
  • SAFFir is an autonomous robot firefighter being tested by the Navy for dangerous situations. Unlike other firefighting robots, SAFFir is both autonomous, and stands on two legs, with two hands to grasp fire hoses.
    Robots save lives: robot fire-fighters take on explosive situations. SAFFiR shows how they can be ultimately be autonomous.
  • $25.8 million Low Carbon Innovation Fund aims to help commercialize technologies that reduce greenhouse emissions.
  • Researchers Discover Surprising Role for Water in Energy Storage
  • Regional LNG plant approved in Quebec
  • Forest vertical cities in China: first forest city under construction covered in 1 million plants; produce 900 tons oxygen daily
  • Next Hydrogen Clean Energy Production Seeks US Partners — Could Set Precedent for Future Energy Relations
  • Canadian Solar could earn $2.3 billion through acquisition of Recurrent Energy
  • Pipelines, railways equally safe for transporting crude oil: report
  • Canada's wholesale sales rose 0.7 per cent in June, to $56.4 billion
  • Aerospace volatility evident in manufacturing output for December
  • Women wanted in construction trades as "tremendous opportunity" exists
  • Enbridge pipeline reversal approved by National Energy Board
Scroll to Top