A module arrives aboard a vessel at Kitimat, B.C., on March 10. The module is for installation at LNG Canada’s export terminal in Kitimat.Courtesy of LNG Canada
A vice-president from Shell Canada has been appointed as the new chief executive officer at LNG Canada during the B.C. project’s peak construction phase.
Jason Klein replaces Peter Zebedee, who stepped down in late March as CEO of the project, which is being built in Kitimat for exporting liquefied natural gas to Asia.
Mr. Zebedee’s surprising exit took effect as the B.C. export terminal entered its busiest construction period. He joined Suncor Energy Inc. this week as executive vice-president of mining and upgrading in Alberta.
The appointment of Mr. Klein makes him the third LNG Canada CEO to be hired from Shell Canada since the project applied for approvals from environmental regulators in 2014. Andy Calitz served as the project’s CEO for the first five years, followed by Mr. Zebedee for nearly three years.
“I’m excited to join the team, especially at this time with construction in Kitimat progressing steadily and safely toward completion and the organization preparing for decades of successful operations,” Mr. Klein said in a statement on Wednesday.
He formerly worked as Shell Canada’s vice-president of integrated gas.
LNG Canada began building its $18-billion terminal in 2018 and is aiming to start exporting the fuel on ocean-bound vessels in 2025. The terminal is being constructed on a Kitimat industrial site on the traditional territory of the Haisla Nation.
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London-based Shell PLC, through a Canadian unit, is the largest partner in LNG Canada, with a 40-per-cent stake. The other partners are Malaysia’s state-owned Petronas (25 per cent), PetroChina (15 per cent), Japan’s Mitsubishi Corp. (15 per cent) and South Korea’s Kogas (5 per cent).
“Jason takes over accountability for LNG Canada at a very important and active time,” Susannah Pierce, Shell Canada president and country chair, said in a statement.
Steve Corbin, executive project director at LNG Canada, had served as interim head of the Kitimat project since late March.
LNG Canada’s co-owners are considering a large expansion of the Kitimat terminal in what would be Phase 2, including the possibility of using electric-drive technology for supercooling natural gas into liquid form. Phase 1 will use turbines powered by natural gas in the liquefaction process.
“I think that ultimately as we look into the future, the most competitive LNG projects will need to be low on the cost curve and low on the carbon curve,” Wael Sawan, the head of Shell PLC’s integrated gas and renewables division, said in a recent interview. “And of course with electric drive, you’re able to reduce even further what we call Scope 1 and Scope 2 emissions.”
Scope 1 carbon emissions are those from sources owned or controlled by a company while Scope 2 refers to indirect emissions from the purchase of electricity, heat or steam.
“B.C. of course is blessed with available hydro. So you do have low-carbon power, but it needs to be able to be allocated to the projects in future that require it at costs that make it viable to invest in those opportunities,” Mr. Sawan said.
LNG Canada estimates project-related costs will total $40-billion for the first phase, counting the Kitimat terminal and various infrastructure that includes the Coastal GasLink pipeline to be operated by TC Energy Corp.
“Because of the lack of infrastructure in Canada, it’s very difficult to do these megaprojects, and LNG Canada has stood as an example of how hard it is,” said Omar Mawji, an energy finance analyst with the Institute for Energy Economics and Financial Analysis.
Coastal GasLink would transport natural gas from northeast British Columbia to the Kitimat terminal, with the pipeline already designed to have the capacity to handle LNG Canada’s potential Phase 2, subject to adding more compressor stations.
The contentious pipeline project has a current price tag of $6.6-billion, but Mr. Mawji estimates cost overruns could reach about $1-billion.
While Coastal GasLink has been approved by 20 elected First Nation councils along the 670-kilometre route, the pipeline project has been the target of protests led by a group of Wet’suwet’en Nation hereditary chiefs who say a 190-kilometre portion of the route goes through unceded territory under their jurisdiction.
Of the 24 Canadian liquefied natural gas proposals listed by federal authorities in 2017, there were 18 in B.C., three in Nova Scotia, two in Quebec and one in New Brunswick. LNG Canada, which would become the country’s first LNG export terminal, is the only one under construction.
The other Canadian proposals have been either cancelled, suspended or still experiencing lengthy delays, though Russia’s invasion of Ukraine has heightened interest generally in the gas from European countries keen to wean themselves off Russian supplies of natural gas.
A new entrant, LNG Newfoundland and Labrador Ltd., is studying the feasibility of securing offshore reserves of natural gas from the Grand Banks.
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