The British Columbia government is eager to see the LNG Canada project expand to Phase 2 as soon as possible, in a marked departure from earlier political sentiment towards hydrocarbons that were strongly negative.
LNG Canada is due to make the final investment decision on Phase 2 of the same-name facility in Kitimat soon, and British Columbia Premier David Eby this week said he hoped the decision comes by the end of this year, describing it as the “largest private sector investment in Canadian history,” as quoted by CBC.
Backed by Shell, Petronas, PetroChina, Mitsubishi, and Kogas, LNG Canada has redirected a portion of Canadian gas exports—previously flowing almost entirely to the U.S.—toward global markets. The price tag of the project is $40 billion. Construction of the first train took seven years. The first cargo set off from Kitimat in June last year.
Since then, the terminal has been ramping up shipments, with the bulk going to South Korea. Although the previous Canadian federal government had claimed there was no business case for LNG exports, the LNG Canada partners apparently begged to differ—and now so does the provincial government of British Columbia.
Indeed, the B.C. government is so happy with LNG Canada that it announced an “enhanced cooperation agreement” with the company this week. The final investment decision on Phase 2 depends on the agreement of all partners.
Meanwhile, political enthusiasm bout Canadian liquefied gas is not being shared by environmentalists, who are calling for a reversal of the industry’s growth, enforced by the government. Most recently, a group called the Canadian Association of Physicians for the Environment claimed LNG Canada was flaring more gas than it was allowed to, releasing “health-harming chemicals, including black carbon and benzene, a potent carcinogen for which there is no safe exposure level.”
The chief executive of LNG Canada responded by saying that higher flaring rates were normal during start-up and that the company was “monitoring, very carefully, the emissions levels in the community.”
By Irina Slav for Oilprice.com
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