A liquefied natural gas (LNG) plant now on the verge of reaching the construction stage could be the first of at least three such projects, each bringing several billions of dollars of investment to
northern B.C.
On Thursday, the National Energy Board granted an permit to KM LNG Operating General Partnership to export up to 10 million tonnes of liquefied natural gas over a 20-year period.
It paves the way for construction of an LNG plant in Kitimat and the 463-kilometre Pacific Trails pipeline from Summit Lake, just north of Prince George, tapping into existing infrastructure connected to northeastern B.C.
Preliminary estimates put the cost at $5.5 billion for the two projects but Paul Wyte, a spokesman for Apache Canada Ltd., one of the three partners in the project, said a firmer figure will be brought to the boards of directors early next year for a final investment decision.
However, Wyte indicated that step should be a formality.
"We're very encouraged," Wyte said Friday.
"Obviously you need an export licence to ship natural gas to international markets. We received that yesterday, it was great news for the project and it
really helps us move forward."
KM LNG is negotiating sales contracts with potential overseas customers, Wyte added, "and having that licence really bolsters those negotiations."
The LNG plant stands to generate 1,500 person years of work over two years and 120 to 140
permanent jobs upon completion in 2015. The pipeline will account for a further 1,500 jobs during construction according to the most
recent numbers.
The premier's job plan alluded to two more LNG plants coming online by 2020 although no names were provided.
However, a representative of Calgary-based Progress Energy Resources Corp. confirmed Friday a report the company, in partnership with Petronas, a Malaysian state-owned company, is in the early stages of a detailed feasibility study for an LNG plant.
"We haven't selected a site as of yet, that'll be part of the detailed feasibility study," said Progress spokesman Greg Kist.
The partnership has significant holdings in the Montney region of northeast B.C.
Whether a separate pipeline would be required or a shared arrangement can be found is to be determined, Kist said.
He said the two are looking at about a $15 billion price tag for the first five years of their joint development program to build the plant, the pipeline and the facilities in northeast B.C.
"It's a major investment," Kist said.
Shell Canada also has holdings in the Montney region and spokesman Stephen Doolan said the company is "exploring the potential to develop an LNG project in British Columbia."
He did say Shell has some partners - Mitsubishi, Korea-based Kogas and the Chinese National Petroleum Company.
The LNG plants are effectively giant refrigerators that supercool the gas to -160 C where becomes liquid and make it cost
efficient to transport via supertanker.
B.C. Jobs, tourism and innovation minister Pat Bell dismissed concerns B.C. Hydro lacks the capacity to provide enough electricity for the plants.
He said Hydro currently has enough existing capacity for the KM LNG project and one more and more will be added as needed.
"We've been very clear about this, that we're not going to let power stand in the way between us and a vibrant LNG industry,"
Bell said.
"So we have some options we are considering."
The National Energy Board's decision could not have come soon enough, said Bell.
"This was critical that it happened quickly," he said. "We are in competition in particular with Australia to ship liquefied natural gas into China and the first one in wins and the decision by the National Energy Board I think really gives us the opportunity to be the winner here."
