Must wait until 2014 to know Kitimat LNG’s fate

A Chevron vice president has said that an investment decision won't be final until 2014.

An August 2 statement from Chevron Canada vice president of upstream and natural gas George Kirkland has put 2014 as the date of an investment decision on Kitimat LNG.

Kitimat LNG, which currently has a 20 year export licence and all required environmental permits, is a partnership of Chevron Canada and Apache.

Kirkland was speaking to analysts during a conference call when he said people will have to wait until 2014.

The Sentinel tried to arrange and interview with Kirkland, but did receive a short update from Chevron communications spokesperson Gillian Riddell.

She explained that Kitimat LNG is still in the process of putting together their Front End Engineering Design (FEED) study, and that once it’s complete will give Apache and Chevron a solid understanding of the economics and logistics of construction the liquefied natural gas plant, which will from there lead to a final investment decision.

“The current focus of the FEED phase is on finalizing the LNG plant, pipeline and upstream basis of design and execution,” she wrote. That includes a focus on marketing the LNG to Asian customers.

She did say that early work is ongoing at the site, which includes clearing and foundation preparations for the plant.

They are also upgrading the existing forestry service road to the site to a paved all-weather road, and are preparing the construction camp and yard at the former Eurocan site.

We asked about competition between B.C. and Australia for LNG exports, and Riddell noted that global LNG markets are very competitive, and that Chevron has two projects in development in Australia at the moment, one called Gorgon and another Wheatstone.

“All these projects are following their own unique timelines, and all projects are developed on their own merits,” she said. “Gorgon is expected to deliver its first LNG cargo in 2015, and Wheatstone in 2016.”

Kitimat LNG, she continued, “has many advantages,” which includes Chevron and Apache’s stake in a large gas deposit in the Horn River and Liard basins, First Nations benefit agreements, and the environmental and regulatory approvals.

The Kitimat LNG site, a proposed initial five million tons a year plant, is expected to be supplied by the proposed Pacific Trail Pipeline.

As of February this year, Chevron and Apache both share a 50 per cent stake in the Kitimat LNG project.