LNG Canada CEO Jason Klein stands on a receiving platform overlooking LNG processing units called trains, right, that are used to convert natural gas into liquefied natural gas at the LNG Canada export terminal under construction, in Kitimat, B.C., on Sept. 28, 2022.DARRYL DYCK/The Canadian Press
Canada’s first terminal for exporting liquefied natural gas is 85 per cent completed, with the B.C. megaproject seeing encouraging signs for potentially embarking on a major expansion, says the chief executive officer of LNG Canada.
Jason Klein said he is pleased that B.C. Premier David Eby and his Western counterparts recently released a joint communiqué that included support for LNG exports.
“Canada is on the cusp of becoming the next big supplier of LNG and we are going to be providing reliable, responsibly sourced LNG to the world at a time when many of our allies and partners are looking for that,” Mr. Klein said in an interview on Thursday.
His bullish outlook follows the joint communiqué from the premiers of the four Western provinces and three territories after the politicians met in Whistler, B.C., last week.
“International co-operation, such as exporting low or zero-emitting Canadian LNG, hydroelectricity, uranium and hydrogen can play a role in reducing global emissions,” according the June 27 statement from the seven premiers.
Industry analysts, however, say Canada remains far behind the United States in developing LNG export terminals. The first LNG export facility in the lower 48 states began operating in 2016 and another six U.S. sites have opened since then.
In sharp contrast, the Shell PLC-led LNG Canada project in Kitimat, B.C., is the only LNG export terminal under construction in the country. LNG Canada’s Phase 1 is scheduled to begin shipments to Asia in 2025, with the goal of exporting 14 million tonnes a year of LNG.
LNG Canada’s co-owners are considering whether to forge ahead with Phase 2 expansion plans that would double the project’s export capacity of natural gas in liquid form.
“We really see an opportunity to build on the success of Phase 1 and the benefits it’s providing to British Columbians and Canadians. And that includes additional jobs in construction, more local contracts and new infrastructure,” Mr. Klein said.
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LNG Canada expects to receive the 215th and final module for Phase 1 in Kitimat before the end of July. “It’s been just another exceptional year of progress,” said Mr. Klein, who will be one of the keynote speakers at a four-day international LNG conference that will begin on Monday in Vancouver.
The Kitimat terminal is located on the traditional territory of the Haisla Nation. “Premier Eby and his government have acknowledged the benefits that further LNG development can bring to B.C. and how it’s already helping advance reconciliation in B.C. with Indigenous communities,” Mr. Klein said.
He said there has been progress in discussions with BC Hydro about the prospect for greater capacity for hydroelectricity that would be required if Phase 2 is to eventually switch to electric motors for driving compressors for liquefaction instead of motors powered by natural gas.
BC Hydro CEO Chris O’Riley told The Globe and Mail in February that it would normally take eight to 10 years for the Crown corporation to devise and construct a major transmission project. Mr. O’Riley said it’s important to supply more hydroelectricity to northern British Columbia to help the province meet its climate goals, but he warned that major proposals such as the North Coast transmission line are complex.
Mr. Klein said internal decision-making processes still remain before the five co-owners of LNG Canada rule on Phase 2. Factors that will be considered include competitiveness, affordability and future emissions of greenhouse gases.
Shell RYDAF is the largest partner in LNG Canada, with a 40-per-cent stake, followed by Malaysia’s Petronas PNAGF at 25 per cent. The other co-owners are PetroChina PCCYF (15 per cent), Japan’s Mitsubishi Corp. MSBHF (15 per cent) and South Korea’s Kogas (5 per cent).
The contentious Coastal GasLink pipeline, to be operated by TC Energy Corp. TRP-T, would transport natural gas from northeast B.C. to Kitimat.
Total costs have been pegged at $48.3-billion for LNG Canada’s Phase 1, counting the $18-billion Kitimat terminal and various infrastructure that includes $14.5-billion for the pipeline, as well as annual budgets for drilling in the North Montney region in northeast B.C.
Five proposals for exports using tankers remain active in B.C., including potential expansions at LNG Canada in Kitimat and FortisBC’s Tilbury LNG domestic plant in Delta. The other projects are Cedar LNG and Ksi Lisims LNG on B.C.’s North Coast and Woodfibre LNG near Squamish.
The B.C. government’s Energy Action Framework announced in May states that new LNG proposals need a credible net-zero plan for emissions by 2030. Climate activists say B.C.’s focus should be on renewable energy, not on fossil fuels such as LNG.