The provincial government says it recognizes that federal anti-dumping duties would boost the capital costs of LNG plants and infrastructure projects in B.C.
And to that end, a provincial energy ministry statement indicates it has “initiated a competitiveness review of British Columbia’s LNG industry and its capacity to compete globally”.
The duties were brought in after Canadian manufacturers of fabricated industrial steel components complained that foreign companies were being subsidized by their host countries, allowing their components to be imported at less than market value.
But those foreign-made manufacture components, chiefly made in China, figure prominently in construction plans by LNG proponents such as LNG Canada which wants to build a facility at Kitimat.
“Our goal is to make sure we evaluate measures that help the sector grow and diversify, so we can overcome market challenges and create good, sustainable jobs for British Columbians,” the provincial statement indicated.
“Staff with the Ministry of Energy, Mines and Petroleum Resources will continue to engage with the federal government to ensure the scope of federal duties doesn’t create unintended impacts for LNG proponents,” the statement added.
One of the proposed LNG projects in Kitimat, LNG Canada, said the prospect of the duties poses a “significant commercial jeopardy”.
“It is expected large complex modules will need to be imported since fabrication yards in Canada cannot and do not build modules of the scale and complexity required for the project (these structures are equivalent in size to a ten-story building and are designed to be joined together on site),” said company official Susannah Pierce.
“Once these modules are built, they must then be transported to site, which poses another challenge even if a Canadian fabrication yard could build modules of this scale and complexity – highways would have to be widened, bridges raised etc.
“Essentially, the modules would be rolled off from the yards to ships and then rolled onto site where they would then be connected together by the thousands of workers on site.”
LNG Canada is seeking a review of the anti-dumping decision.
Also registering its concern with the federal government is the second proposed LNG project at Kitimat, Kitimat LNG.
“[The] duty as it is, is one of several factors that could negatively impact the competitiveness gap between proposed Canadian LNG projects and those being developed in other jurisdictions,” indicated the company.