Chevron Asks to Double Proposed LNG Project as B.C. Completes ‘Fiscal Framework’ for LNG Canada
Chevron Canada has asked the National Energy Board to nearly double the size of its proposed Kitimat LNG facility, seeking a 40-year licence to export up to 28.23 billion cubic metres of natural gas per year, just days before B.C. Premier John Horgan affirmed that the fiscal framework for another LNG megaproject has fallen into place.
The Canadian Press says Chevron’s request is the equivalent of about 18 million tonnes of gas per year, nearly double the 10-million-tonne, 20-year licence it originally received. That permit is due to expire at the end of 2019.
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Chevron proposed the project in partnership with an Australian firm, Woodside Energy. At an LNG conference last week hosted by the Haisla First Nation, Chevron Canada Vice-President of Public Affairs claimed electrification of the project would make if “the Tesla of LNG plants”, and a boon for the province’s independent power producers.
“The partners have not made a final investment decision, nor have they set a date to do so,” CP notes. “But the expanded project is seen as another hopeful sign for B.C.’s nascent LNG industry after the LNG Canada consortium announced last fall it would proceed with its C$40-billion, 14-million-tonne-per-year project, also to be built near Kitimat.”
As for the heavily-subsidized LNG Canada project, Horgan said the passage of B.C.’s Income Tax Amendment Act last Thursday will secure the biggest private sector investment in Canadian history. “Changes to the Income Tax Act allow for the implementation of the tax credit for LNG development in the province,” CP reports. “Horgan says the government set four stringent conditions for liquefied natural gas production in B.C., including a fair return for natural resources, jobs for residents, and partnerships with First Nations. The premier says the LNG Canada project meets those conditions and is expected to generate $23 billion in government revenues.”
Meanwhile, oil and gas researchers at Oslo-based DNV GL are urging the global LNG industry to get started on several new projects this year if it hopes to meet projected demand for the product after 2025. That conclusion was drawn from a survey of 291 senior LNG executives, conducted in December and released last week.
The survey predicted the United States will see the fastest growth in LNG exports over the next three years, with the greatest demand for new imports coming from China. “The new era we see emerging for the LNG sector will demand new thinking from our industry to ensure that a rapid evolution in demand and supply can be met,” said Hans Kristian Danielsen, DNV GL’s senior vice president and marketing.