LNG

The Canada Energy Regulator (CER) said it had approved an application from Chevron Corp. for a 40-year licence to export natural gas from the proposed Kitimat LNG project on the Pacific Coast of British Columbia despite environmental opposition.

Cedar LNG in Canada,  a proposed floating export plant backed by the Haisla First Nation in the province of British Columbia, is the subject of a funding offer for citizens to take part in the Canadian federal government's impact assessment as the venture moves forward.

Australian liquefied natural gas project stakeholder Santos, whose most recent acquisition was the Darwin LNG plant in the Northern Territory from ConocoPhillips, has appointed former Apache Corp. senior executive Janine J. McArdle to the Santos Board.

The British Columbia Environmental Assessment Office has filed an updated report comprising 170 pages plus detailed maps on the relaunched Chevron-led Kitimat LNG export project planned for Bish Cove on Canada’s Pacific Coast.

Woodside Petroleum, a shareholder in the Kitimat LNG export project in the Canadian province of British Columbia with US major Chevron Corp., said at a conference in Abu Dhabi that the Perth, Australia-based company would be interested in selling part of its Kitimat stake to a third party.

The British Columbia Oil and Gas Commission has just highlighted the massive volumes of shale gas reserves to underpin LNG export projects in the Canadian province with the Montney Shale alone having 1,965 trillion cubic feet of gas-in-place unconventional resources.

The LNG Canada project led by Royal Dutch Shell will initially produce 14 million tonnes per annum of LNG and has an option to increase its capacity to 28 MTPA.

The Shell project includes a US$5-billion pipeline of 670 kilometres being developed by TransCanada Corp. to bring the feed-gas from the Montney in northeast BC to the Pacific Coast.

Feed-gas for Chevron’s Kitimat 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, also in northeast BC.

Chevron will then transport the gas on the proposed Pacific Trail Pipeline to the liquefaction plant site at Bish Cove, also near Kitimat.

While the BC Commission put the Montney Shale resources in place at around 1,965 Tcf, for the project being developed by Chevron in partnership with Woodside of Australia will use some of the Liard Shale’s 848 Tcf and the Horn River Shale’s 448 Tcf.

The northern natural gas basins account for nine of 10 new wells in the province and currently account for 4.9 billion cubic feet per day, or 77 percent, of BC's output.

“The 42 Tcf of Montney gas booked as market-ready reserves since horizontal drilling and hydraulic fracturing arrived to enable development in 2005 are only 2 percent of the resources, “ said the Commission in its 40-page report.

In the last five years natural gas production has increased by 23 percent resulting in increased loads within the existing pipeline delivery points for the Montney, Horn River and Liard basins.

Most of the gas within these regions is transported by pipelines by Enbridge and TransCanada.

“In 2005, the onset of Montney horizontal drilling with hydraulic stimulation created a new supply of gas. This was followed by Horn River development in 2010. Further development of the Horn River basin has now ceased, awaiting economic gas demand,” stated the Commission.

Chevron has recently revived its almost dormant LNG project originally proposed with Apache Corp. for Bish Cove near Kitimat by applying to regulators for export capacity of up to 18 MTPA.

The prolific Montney formation covers 130,000 square kilometres at various depths of BC and the neighbouring province of Alberta.

The provinces split the geology evenly by area, but BC has about 60 percent of the gas estimated to figure in the Montney marketable reserve forecast, or 271 Tcf of the formation’s total 449 Tcf of marketable gas.

The Commission listed the leading BC Montney shale developers and they include participants in the LNG Canada project, Shell and Petronas of Malaysia.

Other asset holders are Encana Corp., ARC Resources, Tourmaline Oil, Painted Pony Energy, Murphy Oil Corp., Canadian Natural Resources Ltd., Canbriam Energy and Crew Energy.

Shell and its Asian partners, also including PetroChina, Japan's Mitsubishi and Korea Gas Corp. have started work at the brownfield site near Kitimat, a former energy products terminal acquired by Shell in 2011 when the delayed Chevron project had already cleared its Bish Cove site to be ready for construction.

Chevron Corp. has revived its almost dormant Canadian Kitimat liquefied national gas project originally proposed with Apache Corp. for Bish Cove in British Canada by applying to regulators for export capacity of up to 18 million tonnes per annum.

Chevron, the operator of two LNG export plants in Western Australia, now has Australian company Woodside Petroleum as its partner after Woodside purchased assets from Apache in 2014, including stakes in Wheatstone LNG in Australia and the Kitimat venture in BC.

“Chevron and Woodside have applied for a new licence for their Kitimat LNG plant in northern British Columbia that could see it nearly double in size,” said Chevron.

The companies have submitted the application to Canada’s National Energy Board with a revised plant design that may include up to three LNG processing Trains instead of two.

“Chevron and Woodside have re-evaluated the originally proposed two-Train, 10 MPTA LNG plant development concept, with a focus on improving Kitimat LNG cost of supply competitiveness relative to other global LNG projects,” Chevron said in a statement.

The re-launching of the Bish Cove project follows a final investment decision made in October 2018 by the Royal Dutch Shell-led LNG Canada joint venture.

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

Shell and its Asian partners, including PetroChina, Petronas of Malaysia, Japan's Mitsubishi and Korea Gas corp. have started work at the brownfield site, also near Kitimat, and which had been an energy products terminal before being acquired by Shell in 2011 when the Chevron project was already progressing nearby.

The Shell project includes a US$5-billion pipeline of 670 kilometres being developed by TransCanada Corp. to bring the feed-gas from the Montney shale basin in northeast BC to the Pacific Coast.

Shell will initially produce 14 MTPA of LNG and has an option to increase its capacity to 28 MTPA.

Feed-gas for Chevron’s Kitimat 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.

Chevron will then transport the gas on the proposed Pacific Trail Pipeline to the site at Bish Cove.

The US major noted that its Kitimat LNG project was the most mature of the proposed Canadian LNG ventures and it also has an established partnership with the Haisla First Nation who live in the Kitimat area.

“We have key federal and provincial environmental approvals and licenses in place and substantial early work on the LNG site and pipeline route is underway,” said Chevron.

Chevron has a 50-50 partnership with Woodside in the Kitimat venture, though they have yet to disclosed cost estimates or investment and construction schedules.

The Kitimat joint venture said in March 2018 that it had been drilling some appraisal wells in the Liard Basin, though there has been little progress over several years on the plant development front.

However, some environmental and LNG export permits and First Nations benefits agreements are still in place for the liquefaction plant.