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Shell Etc. Decide FID on 14-MTPA LNG Canada Project
= Start-up planned in mid-2020s =
Royal Dutch Shell and participants have made a final investment decision on the LNG Canada project. They will construct a 14-mtpa LNG terminal in Kitimat, British Columbia state, western Canada by spending about US$14 billion. This is the first large-scale LNG project in Canada, which will be completed and start LNG delivery to Asia etc. in the mid-2020s

Shell, which invests 40%, leads the project, and Malaysia's Petronas owns 25% stake in the project, PetroChina and Japan's Mitsubishi 15% each, and KOGAS 5%.

They procure natural gas independently and produce/sell LNG based on their equity rate. The production period is 40 years. They also plan to double the production capacity in the future.

With the green light to the project, the EPC contractors US-based Flour and Japan's JGC Corporation also announced their contract would be valid shortly. Capacity of the project's LNG train was expanded to 7 mtpa from initially planned 6.5 mtpa -- JGC Corporation has succeeded in getting its record high of an about US$5.6 billion contract.

In Canada where shale gas revolution is booming as well as the US, small-scale container LNG shipping was commenced in November 2017, but large-scale shipping by LNG vessels is not yet been started. With the launch of the project in western Canada on the Pacific coast, close to Asian market, Asian LNG buyers such as Japan will add it as one of their procurement sources.

In Canada, Petronas-operated Pacific NorthWest LNG project (PNW-LNG) made a conditional FID based on the government's approval in June 2015, but the project was cancelled in July 2017 as then business environment, low crude oil price etc., was expected not to improve -- Petronas has returned to LNG business in Canada by joining the LNG Canada project.

Even at a global level, FID on such the huge 10-mtpa scale LNG project is the first time in about three years since the PNW-LNG project -- recent projects having achieved FID are just Indonesia's 3.8-mtpa Tangguh Train 3 expansion, US' 4.5-mtpa Corpus Christi Train 3 expansion, and Mozambiquan 3.4-mtpa Coral South FLNG project.

On the other hand, demand for LNG is forecast to further grow mainly in Asia. It is highly likely that the supply and demand will balance in the early 2020s and then tighten as construction of LNG terminal will take four to five years. In response to this, LNG projects are anticipated to accelerate their FID processes.
last modified : Thu 11 Oct, 2018 [10:36]
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