CALGARY, Alberta, October 5, 2018 /PRNewswire/ --

After several liquified natural gas (LNG) projects failed to materialize in recent years, Royal Dutch Shell is pushing forward a long-delayed $40 bn LNG export project in British Columbia, putting Canada on track to seeing a major construction and export boom.

Steve Corbin, Executive Project Director, LNG Canada (VP Downstream Projects, Shell) will be giving a keynote address at the Downstream Engineering & Construction Canada Conference & Exhibition - October 22-23, Calgary, about their game changing project, the largest in Canadian history. https://www.petchem-update.com/canada/

Royal Dutch Shell gave the green light to the $14 billion LNG Canada facility on October 2^nd, pushing it closer to becoming Canada's first LNG export terminal.

LNG Canada is the first large greenfield LNG plant approved in five years and the largest since 2013.

LNG Canada is a joint venture company comprised of four global energy companies with substantial experience in LNG- Shell, PetroChina, KOGAS and Mitsubishi Corporation.

The LNG Canada joint venture is building an LNG export facility in Kitimat, British Columbia, which will initially consist of two LNG processing units, referred to as trains. The first LNG train is expected before the middle of the next decade.

This project would also see the construction of a natural gas pipeline from northeast B.C. to Kitimat, where a new terminal will process and ship LNG to Asian markets.

LNG Canada is advantaged by access to abundant, low-cost natural gas from British Columbia's vast reserves and the relatively short shipping distance to North Asia, which is about 50% shorter than from the US Gulf of Mexico and avoids the Panama Canal.

In addition to explaining the unique opportunity Canada has as a hub for LNG expansion and exports, Corbin will also discuss the requirements for major capital project construction supply chains.

The LNG Plant will be constructed on a large, partially-developed industrial site with existing deep-water port, roads, rail and power supplies.

TransCanada Corporation will build, own and operate the 670-km Coastal GasLink (CGL) pipeline that will connect natural gas from northeastern British Columbia to the export plant in Kitimat.

The joint venture of JGC-Fluor Corporation will be the engineering, procurement and construction (EPC) contractor for LNG Canada and will construct the project on a lump sum basis.

The LNG plant and CGL pipeline will together employ approximately 10,000 people at peak construction with up to 900 people at the plant during the operations of the first phase.

Corbin will share how lessons learned from its joint venture members' major capital projects can be used in LNG Canada project execution.

Export 

Shell's decision to move forward on the massive LNG Canada project signals confidence that global demand will rise quickly enough to keep up with growing supplies of LNG and opens the region up to a massive export market.

It also opens a new competitive front for the U.S. terminal developers who have raced to invest in LNG export facilities.

The terminal will compete directly for Asian business with a wave of new and planned U.S. LNG terminals.

Right now the U.S. has two operating LNG export terminals: Sabine Pass in Louisiana and Cove Point in Maryland. Under construction, however, are five other terminals, which by the end of 2019 could ramp up US export capacity to 9.6 billion cubic feet per day, according to EnergyFactor by ExxonMobil.

The U.S. began exporting LNG in February 2016, when Cheniere brought online its 1.4 BcF/d Sabine Pass export facility in Louisiana. A major change in the LNG demand outlook happened soon after as China began importing more LNG to reduce coal burn in its fight against pollution.

U.S. LNG deliveries to China surged as low prices encouraged buyers to switch from coal, according to the U.S.-China Economic and Security Review.

Demand for LNG grew by roughly 10% or 29 million tons to 293 million tons in 2017 as more economies try to transition away from coal-fired power generation and use cleaner-burning natural gas as a substitute, Shell said in its February 2018 LNG Outlook.

Each joint venture participant will be responsible to provide its own natural gas supply and will individually offtake and market its share of LNG.

Long term supply 

Looking ahead, Shell is convinced that there could be a 275 million tons supply shortage beginning in 2020.

"As much as $200 billion in new investments will be needed to build liquefaction plants around the world as demand has continued to defy expectations," according to Shell.

While the U.S. has been adding one LNG platform after another, Canada hasn't added any new projects since shale gas burst onto the scene largely because of a long, complicated regulatory process, cost, and needed supply chain developments.

Twenty LNG export facilities have been proposed in Canada. 14 in British Columbia, three in Quebec and three in Nova Scotia representing a total proposed export capacity of 257 million tons/year of LNG. Since 2011, 24 LNG projects have been issued long-term export licenses, according to Natural Resources Canada.

"The Final Investment Decision taken by our joint venture participants shows that British Columbia and Canada, working with First Nations and local communities, can deliver competitive energy projects," said Andy Calitz, CEO of LNG Canada. "This decision showcases how industrial development can co-exist with environmental stewardship and Indigenous interests."

Download Petrochemical Update's comprehensive outlook for Canada LNG projects here. http://1.petchem-update.com/LP=21754

Contact: Kerr Jeferies, Petrochemical Update, kerr@petchem-update.com +1-800-814-3459

SOURCE Petrochemical Update