Proposed LNG near Kitimat receives key permit

Joint venture company LNG Canada has obtained a key permit to build a liquefied natural gas (LNG) export facility near Kitimat, B.C.

Joint venture company LNG Canada has obtained a key permit to build a liquefied natural gas (LNG) export facility near Kitimat, B.C.

On Jan. 5, 2016, the company announced that the B.C. Oil and Gas Commission had issued an LNG facility permit for the project, one of the key permits required for the construction and operation of the project.

This was the first LNG project in B.C. to receive the LNG facility permit, which focuses on public and environmental safety, and specifies the requirements the project must comply with when designing, constructing and operating the proposed LNG export facility near Kitimat.

Director of external affairs Susannah Pierce told The Globe and Mail this was a crucial development for the project, following environmental approval from federal and provincial authorities last June.

“Really, what (the permit) looks at is: How are we designing the facility? How are we ensuring that it can operate safely in the community? How have we engaged with the community?”

The proposed project still must ensure it is economically viable and meets several other significant milestones including finalizing engineering and cost estimates, supply of labour, and achieving other critical regulatory approvals before making a final investment decision.

The Shell-led joint venture is proposing to build an LNG export facility that initially consists of two LNG processing units referred to as “trains,” each with the capacity to produce 6.5 million tonnes per annum of LNG annually, with an option to expand the project in the future to four trains.

According to LNG Canada, the company continues to develop a number of important plans to address public safety and minimize the effects on the environment and local community.

“Safety is our first priority,” said Andy Calitz, CEO of LNG Canada. “LNG Canada is working closely with local emergency response organizations, as well as leading safety experts, in the development of an emergency response framework for the proposed project.”

The project is one of 20 LNG proposals in British Columbia. Minister of natural gas development Rich Coleman said in late December that British Columbia’s LNG industry made unprecedented progress in 2015.

“The progress made in B.C. in the last year is remarkable because these are challenging times in the industry; global prices have fallen since we launched our LNG strategy and just as companies are considering making huge investments,” he said. “But here’s what’s important to remember: B.C. is in this for the long-term.”

Coleman also called critics of LNG development in B.C. “short-sighted.”

“If you were to listen to the critics – the ‘scrooges’ of economic development –  they would tell you that progress has stalled and government should relinquish the B.C. jobs plan’s ambitious goals for growth and market diversification,” he said. “Those pessimists, to be frank, are short-sighted; reluctant to admit LNG is making progress, creating jobs and securing long-term prosperity for all of us.”

LNG Canada is a joint venture company comprised of Shell Canada Energy (50 per cent), an affiliate of Royal Dutch Shell plc, and affiliates of PetroChina (20 per cent), Korea Gas Corporation (15 per cent) and Mitsubishi Corporation (15 per cent).