Douglas Channel LNG moves toward 2018 startup

Exmar NV, EDF Trading, and AIJVLP, a joint venture of AltaGas Ltd. and Idemitsu Kosan Co. Ltd., have taken full ownership of the 550,000 tonne/year Douglas Channel LNG project and executed long-term lease agreements with the Haisla Nation regarding land and water tenure, and with Pacific Northern Gas Ltd. for long-term pipeline capacity to supply gas to the project. The Douglas Channel LNG consortium intends to reach a final investment decision on the project fourth-quarter 2015 to begin commercial operations in 2018.

The Douglas Channel LNG project will be a barge-based floating liquefaction plant on District Lot 99 near Kitimat, BC. The project will source natural gas from Western Canada and move it to the plant via PNG’s existing pipeline system under a 20-year transportation contract approved by the British Columbia Utilities Commission.

Exmar will be responsible for the development and operation of the floating liquefaction plant. Exmar and Pacific Rubiales Energy will this year begin operating a barge-based liquefaction plant, Caribbean FLNG, in Tolu on Colombia’s Caribbean coast, supplying LNG for delivery to Caribbean customers (OGJ, Apr. 7, 2014, p. 122).

EDF Trading, a subsidiary of Electricite de France SA, will hold the required pipeline capacity to deliver gas to the project and will be the LNG offtaker. AltaGas agreed last year to become the primary marketer for Painted Pony Petroleum Ltd.’s gas production from Montney shale in northeast British Columbia, explicitly addressing export opportunities from “existing and planned facilities” (OGJ Online, Aug. 19, 2014).

Douglas Channel LNG was initially being developed by the Haisla Nation and Douglas Channel Gas Services Ltd. for second-quarter 2015 startup. The current consortium’s land and foreshore access agreements provide opportunity to expand and accommodate additional LNG processing projects.

Contact Christopher E. Smith at chriss@ogjonline.com.

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