March 2021 – THE RACE TO LNG EXPORTS  PART IV: (Unchartered Territory )

FOCUS: THE RACE TO LNG EXPORTS  (PART IV: Unchartered Territory )

LNG Canada is one of the largest energy investments ($40 billion) to come to fruition in Canada, aimed at exporting LNG product to Asian markets. The group includes a stellar quintet of Joint Venture participants consisting of Shell, Petronas, PetroChina Company Limited, Mitsubishi Corporation and Korean Gas Corporation.

The LNG Canada project consists of building an export facility in Kitimat, British Columbia.

Key features of the proposed facility include:

  1. LNG Processing Units – where natural gas is stripped off its impurities and cooled to a brisk temperature of -162 Celsius to be turned into LNG. Any extra condensate extracted and separated will be railed out to the market.
  • Storage Tanks –  LNG will be piped to storage tanks until it is loaded onto LNG carriers at the wharf.
  • LNG Loading Lines – Two insulated LNG lines will be used to conserve energy, preserve the liquid and transfer the LNG to the storage tanks.
  • Marine Terminal – An existing wharf will be redesigned to accommodate up to two LNG carriers at a time, and any product being loaded onto a particular carrier will be assisted by multiple tugboats. Anywhere between 200 to 400 carriers are expected to dock the terminal on a yearly basis.
  • Rail Yard – The rail yard inside the facility will be connected into an existing rail system, which will be used to load the condensate by-product.
  • Water Treatment Facility – The facility will draw water from the Kitimat River for use in process cooling, drinking and other purposes. Water taken from the river along with any wastewater that is not utilized in the facility’s cooling system will be treated on an on-site wastewater treatment facility before being released back in the river.
  • Flare Stacks – Two flare stacks , 60 and 125 metres tall respectively, will act as safety devices for the facility.
  • Workforce Accommodation – In order to mitigate impact to the Kitimat community of new workforce influx, LNG Canada is building Cedar Valley Lodge, which is a workforce accommodation centre adjacent to the worksite, with the ability to house up to 7,500 people.

After positive discussions with stakeholders, including the Haisla Nation, on October 1, 2018, a final investment decision was made to build the LNG Canada export facility in Kitimat, British Columbia. LNG Canada is the first significant LNG-export facility in Canada to receive a final investment decision.

Peter Zebedee, the CEO of LNG Canada provided an update on the project on February 24, 2020, highlights that included the following:

  • LNG Canada has continued to hit critical budgeted construction milestones, and the first carrier delivery will be feasible middle of the decade
  • The Cedar Valley Lodge is expected to house 1,500 initial employees by early spring
  • $2 billion capital outlay was used for contracts with Indigenous and local BC companies for project construction
  • Addressing the market, there is a record LNG import supply, with a 14% increase in 2019 alone. Two successive mild winters and the present COVID-19 situation have depressed LNG market and tipped the equilibrium. The expectation is that the market will bounce back and the export demand for cleaner energy will continue to rise in the future.
  • LNG Canada has designed its facility to have the lowest Greenhouse Gas emissions of any large LNG export facility operating in the world. The effective methane emission management can further lead to displacing coal as an alternative, environmentally friendly source of energy.

LNG Canada appears to be on the right path. With everything that is happening right now (self-isolation, crashing markets, unstable leadership South of the border), we truly need a win. Time will tell, but LNG Canada appears to be just that.

Thank you for partaking in this 4-part journey with us.

Steve Dimic

Mortgage Associate

I would like to shift focus next month and focus on highlighting 1 to 2 individuals a month that may at times flow under the radar, but are making a huge positive difference to this city.

If you have a person in mind for the expose, or any other ideas for future topics, please feel free to email me at [email protected].

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