A consortium of energy companies led by Shell has announced a C$40bn ($31.9bn) joint venture (JV) to supply liquefied natural gas (LNG) to emerging Asian markets.
The JV, which includes Shell, PetroChina , Mitsubishi , Malaysia’s Petronas, and Korea Gas Corporation, is Canada’s largest private sector investment project, and is expected to deliver 26 million tons of LNG to Asia.
LNG Canada chief executive officer Andy Calitz said in a press release: “The final investment decision taken by our JV participants shows that British Columbia and Canada, working with First Nations and local communities, can deliver competitive energy projects. This decision showcases how industrial development can co-exist with environmental stewardship and indigenous interests.”
The government is contributing C$275m to support the LNG project to be used for infrastructure and marine and environmental protection.
Canadian Prime Minister Justin Trudeau said: “Today’s announcement by LNG Canada represents the single largest private sector investment project in Canadian history. It is a vote of confidence in a country that recognises the need to develop our energy in a way that takes the environment into account, and that works in meaningful partnership with indigenous communities.”
According to Trudeau, the project will have the world’s lowest carbon intensity for any large LNG project.
Shell has a 40% working interest in the project and has predicted LNG demand to double by 2035, driven in part by emerging Asian markets.
Shell director of integrated gas and new energies Maarten Wetselaar said: “Together with our joint venture participants and contractors, we look forward to working with the local community, First Nations, government and the LNG Canada team to build and operate this game-changing project for Canada’s energy industry.”
LNG project concerns Greens
The leader of the Canadian Green Party Andrew Weaver, however, said the announcement was a “profound disappointment”.
“Adding such a massive new source of (greenhouse gases) means that the rest of our economy will have to make even more sacrifices to meet our climate targets. A significant portion of the LNG Canada investment will be spent on a plant manufactured overseas, with steel sourced from other countries,” Weaver said in a statement.
“B.C. taxpayers will subsidise its power by paying rates twice as high and taking on the enormous public debt required to build Site C. There may be as little as 100 permanent jobs at LNG Canada . I believe we can create far more jobs in other industries that won’t drastically increase our emissions.”
LNG Canada is expected to begin construction of the facility in Kitimat, British Columbia this year, with the LNG export terminal coming online by 2024.