British Columbia Sun

$18-billion LNG project projected to meet mid-decade start despite COVID-19 delays

LNG Canada project had to cut in half its 1,500 workforce in the spring because of safety concerns related to the coronavirus pandemic.

LNG Canada says it remains committed to delivering its first liquefied natural gas shipments in the middle of the decade despite setbacks from the coronavirus pandemic.

The $18-billion project will liquefy natural gas from northeast B.C. in a plant at Kitimat in northwest B.C., where it will be loaded onto ships and transported to Asian markets.

It is the only project that moved ahead to the construction phase among several that had been proposed in B.C. to tap into growing demand for energy in Asia and diversify from reliance on export to the U.S.

The major players backing the project include Shell, Malaysian state-owned Petronas, state-owned PetroChina, Mitsubishi in Japan and South Korea’s KOGAS.

LNG Canada says major work is well underway, including advanced site preparation, pile driving and dredging and construction of the marine terminal in Kitimat.

During the summer, LNG Canada opened a major worker camp in Kitimat that can accommodate up to 4,500.

In the spring, the project had to cut in half its 1,500 workforce because of safety concerns related to the coronavirus pandemic. With safety measures now in place, Canada LNG says there are more than 3,200 people working on the project.

“Despite certain impacts resulting from the COVID-19 virus, LNG Canada and our engineering procurement and construction contractor JGC Fluor JV continue to hit critical construction milestones,” said Susannah Pierce, Canada LNG’s director or corporate affairs. “We remain committed to delivering first cargo by the middle of this decade.”

However, one of the two players that won the engineering procurement and construction contract, Texas-based engineering firm Fluor Corp., acknowledged in an earnings call at the end of September that the project was behind schedule because of the pandemic.

Fluor CEO Carlos Hernandez told investment analysts on the call that the company had been in discussions with LNG Canada about the project’s timeline. “At this point, things are as well as they could be under the circumstances,” Hernandez said.

Calgary-based TC Energy, which is building the $6.6-billion Coastal GasLink pipeline component of the project, is also making progress. More than 500 kilometres of the 670-kilometre pipeline right-of-way has been cleared and nearly 50 kilometres of pipe has been put into the ground, according to information on the Coastal GasLink website.

Less progress has been made on the 78-kilometre section that runs through Wet’suwet’en First Nation territory, which was the site of protests against the project earlier this year.

Another, much smaller liquefied natural gas project, the $1.6-billion Woodfibre LNG project near Squamish, has seen construction delayed for a year because of the coronavirus pandemic.

Originally slated to begin construction this past summer, that date has been moved to the summer of 2021.

The project is owned by Pacific Oil and Gas Ltd., part of the Singapore-based RGE group of companies owned by Indonesian billionaire Sukanto Tanoto.

The B.C. Environmental Assessment Office recently granted the project a five-year extension on its environmental approval certificate.

Under the conditions of the certificate, the project was supposed to have been substantially started by October of this year.

My Sea to Sky, an advocacy group opposed to the Woodfibre LNG project, said they were disappointed with the five-year extension.

The group — which opposes the project because it will add greenhouse gas emissions — said it will seek a judicial review to overturn the decision by the Environmental Assessment Office.

“There was zero public engagement on this highly contentious decision, and the B.C. EAO has rubber stamped Woodfibre LNG, completely ignoring input from local governments calling for conditions to be added on greenhouse gas emissions,” said Tracey Saxby, the executive director of My Sea to Sky.

Show More

Leave a Reply

Your email address will not be published.