A sign identifying Shell Canada at the entrance to the former Methanex site. Shell has announced their partnership to develop a proposed LNG facility.

A sign identifying Shell Canada at the entrance to the former Methanex site. Shell has announced their partnership to develop a proposed LNG facility.

Shell announces partnership for LNG project

Shell Canada announced a partnership with three Asian companies to build a large liquefied natural gas (LNG) plant at Kitimat.

Shell Canada announced a partnership with three Asian companies to build a large liquefied natural gas (LNG) plant at Kitimat on May 15.

Shell will own 40 per cent of what’s being called LNG Canada with Korea Gas Corporation, Mitsubishi Corporation and PetroChina Company Ltd. each owning 20 per cent.

“LNG Canada would connect the abundant supply of Canadian natural gas to growing markets around the world. This also begins the formal consultation process with First Nations and local community residents regarding the project,” a press release stated.

This would be the third LNG plant for the Kitimat area, increasing its importance in the world export market for the commodity.

“Our combined expertise, and our focus on technological innovation in delivering safe and environmentally sound LNG projects around the globe, ensures that our LNG Canada project would be well-suited to deliver long-term value for British Columbia and increase access to new export markets for Canada,” says Jose-Alberto Lima, Vice President LNG Americas, Shell Energy Resources Company.

The proposed LNG Canada project includes the design, construction and operation of a gas liquefaction plant and facilities for the storage and export of liquefied natural gas (LNG), including marine off-loading facilities and shipping.

LNG Canada will initially consist of two LNG processing units referred to as “trains,” each with the capacity to produce six million tonnes of LNG annually, with an option to expand the project in the future, the press release stated.

“LNG Canada can create significant economic benefit for the province, First Nations, local communities and the region. Such a project can create thousands of jobs during construction and hundreds of full-time, permanent jobs during operations. Such a significant energy project can also bring indirect economic development opportunities to the region,” the press release adds.

A website set up to provide information on the project indicates the partnership will fill a project description later this year as a step toward undertaking a regulatory review.

Mayor Joanne Monaghan said she was extremely happy with the announcement because of its potential economic impact on her municipality.

“What this does is move the project along,” said Monaghan.

“They don’t say this in the release, but they would need between 5,000 to 7,000 [construction] workers, 600 or more to oversee construction and there would be hundreds and hundreds of permanent jobs,” she said.

Shell has already purchased the old Methanex site as a plant location.

That’s within the boundaries of Kitimat, meaning the municipality stands to benefit from a revitalized tax base.

“When we lost Methanex, it was grim and when Eurocan went down, it was worse. Our council wondered what we were going to do to provide services. But now we are back to getting a pretty vibrant community,” said Monaghan.

She said the task now is to ensure there is significant municipal and health infrastructure to handle an increase in population.

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