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Major West Coast LNG project moves ahead

A positive final investment decision by LNG Canada represents a significant opportunity for Canada

A major liquefied natural gas (LNG) project has been given the go-ahead by LNG Canada. The project would see Western Canadian natural gas transported via pipeline to a natural gas liquefaction facility in Kitimat B.C. From there, LNG would be exported by tanker ships to markets overseas, principally in Asia where LNG demand is significant.

Largest private-sector investment in Canada

The total cost of the project has been estimated at around $40 billion, making it Canada's largest private-sector project to date. The project is expected to create jobs and drive significant economic growth in B.C. and across Canada. It's estimated that a West Coast LNG industry, exporting about 30 million tonnes per annum, would grow Canada’s economy by an average of $7.4 billion per year over the next 30 years.

LNG Canada is a consortium of partners that include Shell, PETRONAS, PetroChina, Mitsubishi Corporation and KOGAS. Their large-scale LNG export terminal in Kitimat will initially export LNG from two processing units for an estimated 14 million tonnes per annum, with the potential for future expansion. LNG Canada says construction will begin immediately with first gas exports to begin around 2025.

In addition, TransCanada announced plans to proceed with the construction of its $6.2-billion Coastal GasLink pipeline project, transporting natural gas from northeastern B.C. to the LNG Canada terminal in Kitimat, B.C. The pipeline will have an initial capacity of 2.1 billion cubic feet per day (Bcf/d), with the potential to expand up to 5 Bcf/d. Construction will begin in early 2019 with a planned in-service date of 2023.

Meeting global demand for energy, reducing GHGs

Exports of Canadian natural gas would primarily be used for electricity generation in growing Asian economies such as China and India and would directly compete with coal.  When used for electricity, natural gas emits approximately 40 per cent fewer greenhouse gases than coal.

LNG import terminals in Shanghai: China is one of the fastest growing importers of LNG as it moves to meet growing energy demand and reduce GHG emissions.

By 2040, global natural gas demand is expected to increase 45 per cent, and Canada’s enormous natural gas resources can help meet that growing demand in an environmentally and socially responsible manner.

Important step forward

In its news release, LNG Canada emphasized that the project is supported by First Nations, communities, all levels of government, business, labour and others.  

“The Final Investment Decision taken by our joint venture participants shows that British Columbia and Canada, working with First Nations and local communities, can deliver competitive energy projects. This decision showcases how industrial development can co-exist with environmental stewardship and Indigenous reconciliation," said Andy Calitz, of CEO LNG Canada.

Tim McMillan, president and CEO of CAPP applauded the decision as an important step in building a Canadian LNG industry.

"Canada has an opportunity to supply that market with responsibly produced resources and realize the important economic benefits that come with it.”

Tim McMillan, CAPP

“Today’s announcement by LNG Canada represents an important next step in the development of a new industry in Canada, one that would provide access to growing Asian markets for Canada’s vast natural gas resources,” said McMillan. “There is a clear and growing demand for natural gas, globally — especially in developing countries such as India and China. Canada has an opportunity to supply that market with responsibly produced resources and realize the important economic benefits that come with it.”