The LNG Canada industrial energy project is seen under construction in Kitimat, B.C., on Sept. 28. The project is now 70 per cent completed.DARRYL DYCK/The Canadian Press
The boom is in full swing at a construction site in northern British Columbia, where thousands of workers have poured in to help build an $18-billion terminal to export liquefied natural gas.
Jason Klein took over as LNG Canada chief executive officer in April, just as the megaproject entered its busiest building schedule.
Mr. Klein said he is optimistic on the demand side for LNG globally.
“It’s an exciting time to be here,” he said on Wednesday during a media briefing on the sprawling construction site at the head of Douglas Channel.
Indigenous-led Cedar LNG seeks regulatory approval under new climate rules
Construction of LNG Canada’s Phase 1 terminal began in 2018 on a Kitimat industrial site on the Haisla Nation’s traditional territory. The project is now 70 per cent completed.
Kitimat has a year-round population estimated at 8,500 residents, and the frenzy of building activity has resulted in thousands of workers pouring into the community.
The peak of construction will last until the end of next year, with the Kitimat project requiring up to 7,500 workers on rotation, including room for 4,500 people at any given time at the on-site accommodation centre called Cedar Valley Lodge.
LNG Canada’s Phase 1 is on track to start exports to Asia in 2025, when it would become the country’s first export terminal for the fuel.
London-based Shell PLC and the four other co-owners of the LNG Canada joint venture are pondering whether to approve Phase 2, which would double the export capacity to 28 million tonnes a year.
The co-owners have not indicated a deadline for making a decision on whether to forge ahead with Phase 2, but Mr. Klein said expansion plans are being scrutinized seriously. “We’re having really in-depth conversations about Phase 2,” he said. “I’m confident the world needs more Canadian LNG.”
To feed the export terminal, TC Energy Corp. is building the $11.2-billion, 670-kilometre Coastal GasLink pipeline, which is designed to transport natural gas from the North Montney region in northeastern B.C. to Kitimat.
The contentious pipeline is opposed by Wet’suwet’en Nation hereditary chiefs, who say a large segment of the route crosses into their unceded territory.
Workers survey the inside of a massive liquefied natural gas storage tank. Construction of LNG Canada’s Phase 1 terminal began in 2018 on a Kitimat industrial site on the Haisla Nation’s traditional territory.Darryl Dyck/The Associated Press
While the Kitimat economy in general is booming, the prosperity has been spread out unevenly.
Deanna Schwarz, manager of the local thrift store, has three employees and has had trouble trying to hire one or two more.
“We try to get people even to bring in résumés and it has been a struggle,” she said.
Tammy Malcolm, a server at the Chalet Restaurant in Kitimat, said small businesses can’t compete with the higher wages at work camps, so it’s common for a wide range of retailers and fast-food outlets to be short-staffed.
“People are going to follow the money, and you can’t really blame them,” Ms. Malcolm said during the breakfast portion of her split shift.
The Chalet recently began closing on Sundays because of the lack of staff, even though that was the busiest day of the week for attracting customers.
The nearby Tim Hortons outlet can barely keep up with demand, with long lines of customers in pickup trucks waiting their turn to get to the drive-through window. Depending on the day, the fast-food restaurant often has to open late for breakfast or close early at night, given insufficient staffing levels.
Kitimat Mayor Phil Germuth said there are other factors behind the service-sector’s labour crunch that go well beyond his district municipality, with staffing shortages common across Canada after the lifting of COVID-19 pandemic lockdowns.
“It’s not a unique situation here in Kitimat, where you have businesses that don’t have enough people to keep them going full time,” Mr. Germuth said in an interview in a meeting room at City Hall, located on the third floor of a shopping mall.
Jason Klein took over as LNG Canada chief executive officer in April, just as the megaproject entered its busiest building schedule. Mr. Klein said he is optimistic on the demand side for LNG globally.DARRYL DYCK/The Canadian Press
Since most of the workers and contractors are from out of town and don’t need to patronize many local businesses, the boom has not necessarily translated into a surge in revenue for retailers.
It has been a delicate balancing act for LNG Canada to welcome people to the work camps while avoiding putting a strain on local services, Mr. Germuth said.
At the City Centre Mall, where Ellis Ross popped by this week on an errand, the hoped-for retailing renaissance has not transpired. Mr. Ross is a member of the provincial legislature who represents the provincial Skeena riding and is the former elected chief councillor of the Haisla.
Still, the economic spinoffs from LNG Canada’s construction have helped Haisla residents in Kitamaat Village, located a 12-minute drive away from Kitimat.
“The Haisla Nation has its own money, and we’ve built a youth centre,” said Mr. Ross.
He is an unabashed booster of LNG exports, but disappointed that Canada has yet to become a major player on the global LNG stage. “Europe is in an energy crisis,” Mr. Ross said. “But the rest of the world – those that understand energy – is laughing at Canada.”
An LNG processing unit called a train that is used to convert natural gas into liquefied natural gas is seen at the terminal under construction in Kitimat.DARRYL DYCK/The Canadian Press
Europe has been seeking to reduce its dependence on natural gas from Russia, which invaded Ukraine in February.
Mr. Ross and industry experts say LNG Canada’s exports of natural gas in liquid form to Asia would indirectly help Europe because that frees up supplies of the fuel elsewhere in the world to be rerouted to Germany and other European countries experiencing an energy crisis.
Besides LNG Canada’s expansion potential, there are three other LNG proposals in B.C., with all of those aiming to start exports as soon as 2027.
Cedar LNG, a small-scale project co-owned by the Haisla Nation and Pembina Pipeline Corp., is proposing to build a $3-billion export terminal in Kitimat and hoping to begin exports to Asia in about five years. Cedar would rely on natural gas transported by Coastal GasLink.
Another small-scale project, Woodfibre LNG, is preparing for construction next summer at an industrial site located on the Squamish Nation’s traditional territory. Enbridge Inc. will be acquiring a 30-per-cent stake in Woodfibre, which hopes to start exports in 2027.
As well, a group of natural-gas producers known as Rockies LNG is promoting the Ksi Lisims LNG proposal in northern B.C., in collaboration with the Nisga’a Nation. One of the pipeline routes being contemplated by Rockies LNG is TC Energy’s proposed Prince Rupert Gas Transmission project.
Brent Jang