Civeo scaling back accommodation plans in Kitimat

A worker accommodation company scales back in Kitimat

A worker accommodation company is scaling back its Kitimat plans in response to the changing prospective liquefied natural gas (LNG) landscape in the area.

Edmonton-based Civeo has asked the District of Kitimat for a new development permit for its 100 Loganberry/Sitka Lodge location to reduce the number of beds there from 2,154 to 1,101.

And, cautioned the company, its final total could even be reduced to 646 beds depending upon the state of the Kitimat-area LNG industry.

“Current economic conditions and construction delays have required a revised consruction plan layout and schedule,” stated the company in its application filed with the District.

That new development permit application now calls for two phases – the first being the 436-bed permanent facility now nearly finished and a second phase of a 364-bed facility. But, District of Kitimat background information that accompanied the application said Civeo “is proposing to proceed with Phase 2 only if Civeo is the successful bidder to build LNG Canada’s construction camp ….”

“If the contract is not obtained, Civeo will not advance Sitka Lodge beyond Phase I.”

That LNG project, with Shell as its lead partner, had been expected to make a final investment decision early this year but that decision has now been pushed back toward the end of the year.

District of Kitimat background information terms Civeo’s plans as changing from “a schedule-driven project to a budget-driven project.”

Also incorporated into Civeo’s new plans is seeking permission to convert its current 210-bed temporary construction camp into a more permanent facility. That camp now houses workers finishing the Phase I.

Combining the Phase 1 436-bed count with the 210 beds in the temporary camp would make for 646 beds as a base level at the location.

Should the second 364-bed phase be required, the total number of beds at the location would then total 1,010.

The current development permit 2,154 bed total was established in 2014 during the height of LNG project economic impact speculation.

Following District of Kitimat procedures, it’s now inviting public comment on the proposed new development permit leading up to Kitimat council’s March 21 meeting.

A smaller Civeo camp also has financial implications for the District of Kitimat’s eventual plans to encourage affordable housing.

A $500 per bed levy for the district’s affordable housing fund kicks in for the bed total over 360.

At the original development permit size of 2,154 beds minus the 360 base bed total, Civeo would have paid the district $897,000.

With a smaller project now wanted, Civeo would therefore pay less.

The 210-bed temporary construction camp was exempt from the $500 bed levy but now that Civeo wants that to be a permanent facility, district staffers are recommeding it be added to the overall bed total.

That means should Civeo build both phases as called for in its development permit application, its levy would drop to $325,000.

That works out to $500 each for 650 beds once the 360 bed base is subtracted from the new plan for 1,010 beds.