LNG Canada postpones FID for Kitimat project

The LNG Canada joint venture has elected to delay a final investment decision (FID) for the project to be built near Kitimat, BC, citing “global industry challenges, including capital constraints.” A decision had been planned for yearend.

Andy Calitz, LNG Canada chief executive officer, said the partners are examining “a range of options to move the project forward towards a positive FID.” However, they cannot confirm when a decision will be made, and in the coming weeks, will continue key site preparation activities while working together with participants, stakeholders, and First Nations to define a revised path forward to FID.

“LNG Canada remains a promising opportunity,” the JV partners said. “It has strong stakeholder and First Nations’ support, has achieved critical regulatory approvals, has important commercial and engineering contracts in place to design and build the project, and through its pipeline partner Coastal Gas Link, has received necessary environmental approvals and First Nations support along the pipeline right-of-way.”

The 300-hectare LNG Canada site is to include a natural gas receiving and LNG production facility; a marine terminal with the capacity to hold two LNG carriers between 140,000-265,000 cu m; a tugboat dock; LNG loading lines that connect the storage tanks to the wharf; roads required primarily during construction and for maintenance; a material offloading facility primarily for use during construction; and supporting infrastructure and facilities that include power supply, water supply, and handling and waste collection and treatment.

A front-end engineering and design contract and a project execution services contract were let in 2014 to Amec Foster Wheeler PLC subsidiary Global Engineering & Construction Group in JV with affiliates of Chiyoda Corp., Saipem SPA, and WorleyParsons Ltd. (OGJ Online, May 21, 2014).

TransCanada Corp. was selected in 2012 to design, build, own, and operate the proposed 700-km, 1.7 bcfd Coastal GasLink, a $4-billion pipeline to transport gas from the Montney producing region near Dawson Creek, BC, to the LNG Canada export facility (OGJ Online, July 12, 2012).

The LNG Canada group comprises Royal Dutch Shell PLC with 50% interest, PetroChina Co. Ltd. 20%, Mitsubishi Corp. 15%, and Korea Gas Corp. 15%.

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