While there is still a good deal of time between now and a potential final investment decision, the LNG Canada project proposal did reach a notable milestone with the formalized agreement of the project as its own company.
The new entity, LNG Canada Development Inc., is headed by CEO Andy Calitz, and includes a new ownership arrangement.
The same four partners are involved in the project but Shell Canada now controls 50 per cent of the project, PetroChina now holds 20 per cent ownership, and KOGAS and Mitsubishi each hold 15 per cent.
Calitz was joined by representatives of those partners and with Premier Christy Clark and Deputy Premier Rich Coleman during the announcement for this on April 30 in Vancouver.
The “uncertainties” the company still has to deal with before there would be any construction at LNG Canada’s site at the former Methanex facility includes the environmental reviews through the Environmental Assessment Office and the Oil and Gas Commission, further consultation with First Nations, a front end engineering and design study (FEED), gas development strategies and labour arrangement, as well as a final cost estimate.
“That work will take 18 to 24 months,” said Calitz.
Ensuring labour requirements and physically building a pipeline through the mountains are among the other issues Calitz is looking ahead to.
LNG Canada has contracted TransCanada to build a proposed natural gas pipeline called Coastal GasLink to deliver the gas to the Kitimat liquefaction facility.
Premier Clark said that the announcement on April 30 is a “vote of confidence” that the province is prepared to work with investors and that its a signal of progress for “all LNG projects and for investors around the world.”
“We cannot get to that final investment decision eventually if we don’t take this important step that we’re taking today,” she said.
She suggested there may be final investment decisions from some LNG companies by the end of this year but added she doesn’t expect to see an LNG Canada final investment decision until at least next year.