LNG Canada Awards $14-Billion Design-Build Contract for Kitimat Plant
The LNG Canada consortium has awarded a contract, reported to be worth C$14 billion, to design and build a liquefied natural gas plant at Kitimat, British Columbia, even though the project is still subject to government approval and a final investment decision by consortium partners.
“That decision is expected this year,” JWN Energy reports. “However, LNG Canada and other LNG developers are still waiting to hear if the federal government will exempt LNG modules from a 45% duty on fabricated steel products imported from China, South Korea, and Spain.”
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
The design-build contract will go to Japan’s JGC Corporation and U.S.-based Fluor Corporation.
LNG Canada stirred controversy in March when the B.C. government unveiled tax incentives to support the project, valued at $40 billion. At the time, Horgan maintained the development would be consistent with his government’s promise to reduce B.C.’s greenhouse gas emissions 40% by 2030—a commitment that is a cornerstone of the New Democrats’ governing agreement with the Green Party of B.C. In a release, Horgan’s office said the project would be the biggest private sector investment in B.C. history, producing up to 10,000 jobs during construction and up to 950 permanent positions.
“No premier or government can dismiss this kind of critical economic opportunity for the people of British Columbia,” the premier said. “But neither will we turn our back on our commitment to climate targets, or our path to reconciliation with Indigenous peoples.”
Weeks before Horgan’s announcement, the Canadian Association of Petroleum Producers secured the province’s assurance that its upcoming scientific inquiry into the natural gas fracking industry would not cover emissions or public health risk, according to documents obtained by DeSmog Canada.
In January, provincial Green Leader Andrew Weaver said Horgan’s trip to Asia to woo project investors could undo the two parties’ governing agreement in a split provincial legislature.
“Lest there be any doubt, let me be perfectly clear: NDP government will fall in non-confidence if after all that has happened it continues to pursue LNG folly,” Weaver tweeted at the time. “The reason why we agreed to the [governing] agreement with the NDP is their supposed commitment to GHG reduction,” he added in a separate tweet. “A push for #LNG means they are not serious. We are willing to let BC voters have their say. We would have been deceived.”
In a release last week, LNG Canada spokesperson Susannah Pierce said the timing of the final investment decision “is up to the joint venture participants to make, and they will weigh their decision against a number of criteria, including project competitiveness, how the LNG Canada project fits within their existing portfolio of projects and investments, and available capital, amongst others.”
The four members of the consortium are Royal Dutch Shell, PetroChina, Kogas, and Mitsubishi Corporation.