Science

$40 billion LNG Canada pipeline project in BC gets green light

$40 billion LNG Canada pipeline project in BC gets green light”

Other large project approvals on the horizon include Novatek's Arctic LNG-2 project with 19.8 million tonnes capacity, after the Russian gas company's Yamal export facility started operations smoothly and quickly at the end of a year ago.

LNG from the project will reach Asia in about half the time it takes from the US Gulf Coast, LNG Canada said. "It seems that mega-projects are back".

A liquefied natural gas (LNG) storage facility of the ENN Group Co is under construction in Baoding, Hebei province, China, December 5, 2017.

The announcement was immediately cheered by the energy industry and decried by the B.C. Green Party, which is part of the coalition supporting the NDP government.

They've stated that the project will be a massive new source for greenhouse gases and threaten the province's climate change goals. "With significant integration advantages from the upstream through to trading, LNG Canada is expected to deliver Shell an integrated internal rate of return of some 13%, while the cash flow it generates is expected to be significant, long life and resilient". "I believe we can create far more jobs in other industries that won't drastically increase our emissions".

"Today, a few dreams are realized", Andy Calitz, the CEO of LNG Canada, said as he announced the company's decision.

Canada pledged $275 million of federal support for the project, along with the commitment on trade barriers. Selling LNG to buyers in Asia promises higher prices for the country's gas compared to what it gets selling it nearly exclusively to the US via pipeline.

LNG Canada has officially gotten the final approval from joint venture participants to move forward with the largest project in British Columbian history.

Getting the LNG project off the ground could be considered a win for the Trudeau government, which has struggled to get major energy projects built in Canada.

The officials, speaking on a not-for-attribution basis, said no LNG legislation is coming this fall and a repeal of the former Liberal government's LNG income tax will not be tabled until the LNG Canada project is about to go into production by 2024.

Ogen-Toews said the string of LNG project cancellations in recent years disappointed her.

However, the District of Kitimat, which will be the terminus of the natural gas pipeline from northeast B.C., as well as the site of the new terminal to process and ship the product overseas, said it is "extremely pleased".

Business interests have placed increasing pressure on Finance Minister Bill Morneau and other officials to improve Canadian competitiveness, through tax cuts, regulatory changes and other measures, arguing that Canada is gradually losing its advantage over USA firms.

Natural gas producers such as Encana Corp and Tourmaline Oil Corp stand to gain as Canada's depressed gas prices rise, Raymond James analysts said.

With the new project, cargoes will be able to travel from Kitimat, BC to Tokyo in a matter of about eight days.

"Without this, the LNG Canada project would take B.C.in the wrong direction".

"We like this announcement which when complete will double the number of export partners Canada has for natural gas (from one to two) and provide an incremental 1.8 billion cubic feet per day of takeaway capacity", National Bank Financial analysts wrote in a research note.



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