OTTAWA: In 2016, when LNG Canada hit the pause button on its multi-billion dollar liquefied natural gas project in Kitimat, CEO Andy Calitz made it clear the project was “delayed not cancelled.”
“The project in Canada is FID ready and has not been cancelled,” Calitz said in 2016.
At a Globe conference forum on energy transition March 14, Calitz confirmed the company plans to seek a final investment decision from the main partners, which includes Royal Dutch Shell, this year.
LNG Canada originally had planned to make a final investment decision in 2016. The project has all of its environmental approvals in place, as well as agreements with First Nations.
While he conceded there are significant challenges to building a new LNG project of the size LNG Canada has in mind – not the least of which is building a new gas pipeline across a mountain range – Calitz also said there are some distinct advantages, one of them being short shipping distanced to Asia.
The LNG Canada project has been roughly estimated to have an all-in capital cost of $40 billion, although LNG Canada has never put a firm number to the project. That includes the LNG plant itself, a new pipeline and upstream natural gas assets.
“LNG Canada will be the largest infrastructure project ever launched in this country, and there is no shortage of funding for it for the so many reasons that it makes sense,” Calitz said at last week’s energy transition forum.
One of the hurdles the company still faces is at the federal level. Last year, Canada slapped tariffs on fabricated steel imports from China, South Korea and Spain.
Since the large LNG modules that are needed cannot be built in Canada, LNG Canada would need to bring them in from Asia. Unless the project gets an exemption from the federal government, the tariffs would add significant costs to the project.
In a statement, Finance Canada did not answer whether a ruling had been made to exempt the LNG Canada project from the tariffs.
