Big LNG investors endorse B.C. plan
The biggest players in B.C.'s liquefied natural gas export proposal are still more than a year away from final commitment, but their latest step forward is a vote of confidence, according to the CEO of LNG Canada.
Representatives of Shell Canada, Korea Gas, Mitsubishi and PetroChina announced signing of a joint venture agreement for the LNG Canada project in Vancouver Wednesday, with Premier Christy Clark and Natural Gas Minister Rich Coleman on hand.
LNG Canada CEO Andy Calitz cautioned that a final investment decision depends on completion of reviews by B.C.'s Environmental Assessment Office and Oil and Gas Commission. The companies will now begin engineering work, and those steps will take another 18 to 24 months, Calitz said.
The partnership includes an increase in Shell's stake to 50%, with PetroChina retaining 20% and Mitsubishi and Korea Gas reducing their shares from 20% to 15. Calitz said the companies have other projects in development in Africa, Australia, Russia and elsewhere, and the change does not reflect any loss of confidence in B.C.
Calitz acknowledged the B.C. government's commitment to increase industrial skills training in the school and apprenticeship system, announced Tuesday.
Clark also announced she is leaving Friday for her fifth trade mission to Asia, with stops in Malaysia, Singapore and Hong Kong, mainly to promote LNG development.
Calitz said there are international factors affecting the export price, but LNG Canada is looking beyond Asia to other world markets.
There are three key factors in deciding whether to commit to the Kitimat project, Calitz said. They are shifts in the gas price in Asia, the supply and cost of labour to build the plant and pipelines, and construction of gas pipelines through the Rocky Mountains.
The companies have an agreement with TransCanada to build a pipeline, and gas production underway in the Horn River, Montney, Cordova and Liard shale formations in northeastern B.C.