LNG

Gaztransport and Technigaz (GTT), the French maritime LNG storage technology company, has received an order from its partner, the South Korean shipyard Samsung Heavy Industries (SHI), for the storage tank design for a floating unit ordered by Canada’s Cedar LNG project in British Columbia.

Pembina Pipeline Corp. and the Haisla First Nation from Kitimat in British Columbia have received environmental approvals to proceed with the near-shore Cedar LNG project on the Douglas Channel and have also signed a feed-gas tolling accord.

Kitamaat Technical Services Group (KTSG), a joint venture including the native North American Haisla First Nation and the resources of three leading industrial service companies, will be seeking to secure contracts and work in LNG projects in the western Canadian province of British Columbia.

KTSG was established by ServcoCanada, Novus Technical Services (Novus) and Well Services Group (WSG) to bring their combined expertise to emerging LNG projects in BC.

“A central tenet of KTSG is to work closely with the Kitimat community and in particular the Haisla Nation, who have occupied lands centred around Kitamaat Village for more than 9,000 years,” said KTSG.

KTSG said it was already supporting the Haisla Nation’s economic infrastructure by providing training for potential LNG supply chain jobs and would assist start-up businesses directly related to services required for contracts secured by the partnership.

Various projects

There are currently at least four LNG export projects under development in BC including LNG Canada led by Shell and the Cedar FLNG project pairing the Haisla First Nation with Calgary, Alberta-based Pembina Pipeline for the Douglas Channel project.

The Nisga’a people are behind a third project, the Ksi Lisims venture near Prince Rupert in BC in partnership with Rockies LNG Ltd and Western LNG LLC.

“The aim is to be the leading energy services organisation in BC with strong international LNG experience, supported by a balance sheet allowing major contracting opportunities to be undertaken which directly benefit the economy of North-Western British Columbia, local First Nations and the wider community,” KTSG explained.

The KTSG contracts and work venture will benefit from the experience of companies like ServcoCanada, already a well-established Kitimat-based business with a 30-year pedigree of providing electrical and instrumentation, mechanical, piping and structural and facility shutdown and maintenance services across Canada and the US.

Infrastructure

Novus is an international provider to the energy and infrastructure sectors which employs more than 10,000 staff in Canada, US, Europe, Middle East, the Caspian and China working on behalf of some of the world’s largest operators.

WSG is a process, pipeline and industrial services specialist and the leading provider of UK and European refinery and LNG terminal services with extensive experience in the Australian LNG market.

KTSG said it was actively bidding for a range of pre-commissioning, commissioning and operations and maintenance contracts on the LNG Canada project under construction at Kitimat and which when completed will export an estimated 14 million tonnes of LNG per annum.

“The LNGC project will transform Canada’s energy producing capabilities and be a major contributor to the local and national economy,” said John Gordon, a spokesman for KTSG and President and Chief Executive of ServcoCanada.

“We believe the combined resources, expertise and successful track records of KTSG’s three partner companies can play an important role in the success of this ambitious development,” explained Gordon.

“From the outset we understood the importance of working with the Haisla Nation, and that creating employment opportunities and supporting indigenous entrepreneurs who could play a role in the supply chain, was just as important as any financial benefits which may accrue,” he stated.

“We are delighted that the Haisla Nation are partners and shareholders in KTSG and we look forward to learning from their vast local knowledge and working together to create sustainable long-term opportunities for their people,” Gordon added.

A fourth LNG plant is being built further south in BC called the Woodfibre project and run by Asia’s Pacific Energy Corp.

The Woodfibre facility is being constructed about seven kilometres from the town of Squamish and 70km north of Vancouver on the brownfield site of a former mill.

This project is giving hiring priority to qualified Squamish First Nation members first, then Squamish residents followed by people from the rest of BC and Canada.

TC Energy, the North American natural gas pipelines and energy transportation group, reported a first-quarter profit compared with a loss in the prior-year period as it boosted LNG feed-gas provisions.

The leader of the Haisla First Nation in British Columbia, Chief Councillor Crystal Smith, along with Pembina Pipeline Corp. Interim President and Chief Executive Scott Burrows and the Cedar LNG CEO Doug Arnell have spoken with optimism about the future development of the Cedar LNG project as it awarded an engineering contract.

Chief Councillor Smith and Pembina's Burrows said the 50-50 partnership’s joint venture had reached critical points in developing the floating LNG export plant near Kitimat in BC.

The FLNG project will be located in the Douglas Channel  and is expected have a liquefaction capacity of up to 4 million tonnes per annum of LNG.

Feed gas for Cedar FLNG will be sourced from the prolific Montney natural gas resource play in northeast BC.

Cedar LNG said it was pleased to announce an agreement with liquefaction technology firm Black & Veatch and South Korean shipbuilder Samsung Heavy Industries (SHI) for the front-end engineering and design (FEED) of the project's proposed floating liquefaction, storage and offloading units.

“Cedar LNG is rooted in meaningfully creating a low-carbon, Indigenous-led business that respects local values and protects the environment,” said Cedar's CEO Arnell.

“The project's low-carbon footprint, coupled with the use of Black & Veatch and Samsung's expertise and technology will result in a state-of-the-art facility the Haisla Nation, British Columbia and Canada can be proud of,” he stated.

FID in 2023

Cedar LNG expects to make a final investment decision in 2023 following completion of the environmental assessment process.

Subject to additional factors, including regulatory and other approvals, the expected in-service date for the project is 2027.

Both Smith and Burrows said their venture was strategically positioned to leverage Canada's abundant natural gas supply and “provide a critical, Indigenous-partnered solution” to support the global clean energy transition.

With recent advancements in the project's regulatory and engineering development, Smith outlined what it meant for the region.

“The Cedar LNG project will be the largest First Nation-owned infrastructure project in Canada, creating jobs, contracting and other economic opportunities for the Haisla Nation, the community of Kitimat, neighbouring Indigenous Nations, and the local region,” stated Smith.

“Cedar LNG represents long-term growth for our region in a way that protects our land and environment, and we are excited to see the project move forward in its environmental assessment process with innovative technology and reduced environmental footprint,” she explained.

Review phase

The application for an Environmental Assessment Certificate (EAC) was recently submitted to the British Columbia Environmental Assessment Office, moving the project into the 180-day application review phase.

This key landmark follows detailed engineering studies and engagement with Indigenous and local communities.

“The submission of our application for an EAC represents another significant step forward in exporting Canadian LNG to overseas markets, while supporting long-term prosperity for the Haisla Nation and the region,” explained Pembina’s Burrows.

“Each time we've returned to our design, whether to include community input or account for leading technology, we've made important improvements that have resulted in a superior project that respects the values of the local community and minimizes environmental effects,” declared the Pembina Interim CEO.

Pembina Pipeline Corp., the developer of the Cedar floating LNG project in British Columbia along with the Haisla First Nation, has announced that President and Chief Executive Mick Dilger had stepped down.

TC Energy Corp., one of North America’s leading pipeline companies and LNG feed-gas suppliers, posted a first-half loss because of the cancellation of the Keystone oil pipeline to the US and is also in a dispute over the Coast GasLink for Canadian LNG projects in British Columbia.

Woodside Petroleum, the Australian operator of two liquefied natural gas plants, said its next earnings statement would recognise a non-cash impairment of $720 million in relation to the Kitimat LNG project and assets in the Canadian Pacific province of British Columbia.

The earnings will be released on February 13 by the company based in Perth, Western Australia. Woodside is operator of the Australian North West Shelf plant and Pluto LNG.

“Kitimat remains a world-class project and Woodside will continue to evaluate actively future development opportunities, including optimisation of gas supply into processing facilities,” said the Australian company.

“However, the impairment reflects increased uncertainty, particularly in the timing of the development of the upstream Liard resource, following sustained depressed gas market conditions in Western Canada,” it added.

Woodside became a shareholder in the Kitimat project in BC after buying a stake from US company Apache Corp. and joining lead developer and operator Chevron Corp. as a shareholder.

However, Woodside Chief Executive Peter Coleman said in 2019 that his company would be willing to reduce its current stake of 50 percent.

Chevron holds the other 50 percent stake in Kitimat LNG and the operatorship of the associated feed-gas reserves.

Coleman said at the time that Woodside did not like holding such a large share in any project when it was not the operator.

He explained that from a capital management and risk management point of view we would rather hold less equity.

The CEO said that in a major project where you are operating, you would like your stake to be between 40 percent and 60 percent equity. 

When you’re a non-operator, anywhere between 20 percent and 40 percent is the right number.

Chevron and Woodside have cooperated for the Kitimat project with the Haisla First Nation on whose traditional land the project at Bish Cove would be constructed.

Feed-gas for the Kitimat liquefaction plant will come from the large upstream shale-gas resources in the 322,000 net acres it has in the Horn River and Liard Basins of northeast BC.

Another nearby project is the Royal Dutch Shell-led LNG Canada joint venture.

Both project sites are almost adjacent and are located about 650 kilometres north of the province’s largest city, Vancouver.

Chevron Corp., a leading liquefied natural gas operator in Australia, said it was downgrading investment plans for other ventures such as the Kitimat LNG project in Western Canada, its US Appalachia shale activities in the US Northeast and some overseas projects.

Rockies LNG, a firm set up by a group of Canadian natural gas exploration and production companies, is considering developing its own barge-based export project on the Pacific Coast of British Columbia as an outlet for abundant gas resources.