Page 5 - NorthAmOil Week 33
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NorthAmOil COMMENTARY NorthAmOil
design for the LNG plant to include up to three liquefaction trains, up from two previously.
“Chevron and Woodside have re-evaluated the originally proposed 2-train, [10mn tpy] LNG plant development concept, with a focus on improving Kitimat LNG cost of supply compet- itiveness relative to other global LNG projects,” Chevron said in a statement at the time.
e updated plan for Kitimat LNG involves an all-electric design, with its 50:50 partners in the project attempting to improve the scheme’s cost-e ectiveness while lowering greenhouse gas (GHG) emissions. Chevron said the new design would result in the lowest GHG emissions per tonne of LNG for any major project globally.
Given the need for a new federal regulatory review, Chevron and Woodside only expect to make an FID on Kitimat LNG in 2022-23, with start-up targeted by 2029. e revised proposal may also require a new federal environmental assessment, so progress could be delayed.
What next?
Wood bre LNG is a far smaller project than both LNG Canada and Kitimat LNG. e project is estimated to cost CAD1.6bn ($1.2bn) and is designed to produce 2.1mn tpy of LNG. Apart from the nalising of the EPC contract and FID, there are no other obstacles holding the project back, according to Wood bre’s Keane. Earlier this year, the company nalised its impact ben- e ts agreement with the Squamish First Nation, as well as receiving permits from the BC Oil and Gas Commission and obtaining a federal waiver exempting it from steel duties. Ottawa has granted a similar waiver to LNG Canada.
Last week, it was reported that Wood bre
had ordered the cryogenic heat exchanger for its facility.
“ is purchase indicates Wood bre LNG’s continued commitment to moving forward towards our FID and start of construction later this year,” Keane said in a statement.
Keane told the Financial Post that the ongo- ing contract negotiations were largely focused on details at this point, adding that he remained con- dent the company would sign the contract in the coming weeks. He also said the company had been negotiating with China National O shore Oil Corp. (CNOOC) and an unnamed Japanese utility for o ake agreements for the remaining two-thirds of Wood bre’s LNG output.
With an FID looking certain, this comes as a boost both for Canadian LNG and for upstream gas producers, which have been hit hard by low natural gas prices and a lack of access to overseas markets.
A Raymond James analyst, Jeremy McCrea, was reported as describing the construction of Wood bre LNG as a small but important step for the natural gas industry, because it demonstrates BC government support of LNG exports from the province. Indeed, not all energy projects can be guaranteed the same support in BC, as illus- trated by the ght over the Trans Mountain oil pipeline expansion plan. However, the ruling provincial New Democratic Party (NDP) is in power thanks to support from the Green Party, which opposes the development of LNG export terminals in the province, citing their impact on GHG emissions. Opposition from the Greens and provincial environmental groups may yet result in further delays for an industry that is already taking years to get o the ground.
Wood bre LNG is a far smaller project than both LNG Canada and Kitimat LNG.
Week 33 20•August•2019 w w w . N E W S B A S E . c o m
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