'First of many': $40B LNG Canada signals revival of mega projects

'First of many': $40B LNG Canada signals revival of mega projects

'First of many': $40B LNG Canada signals revival of mega projects

"For Canada, I think it's a big deal", said Feer, pointing out that Canada's gas export options are now limited to its southern neighbor - where domestic gas production has risen dramatically.

"LNG Canada proves today that British Columbia, the attractive province of British Columbia, and Canada can monetize our significant, low-priced natural gas resources, that we can access new markets in Asia, that B.C. and Canada can attract foreign investment, that B.C. and Canada can deliver competitive energy projects and take a place on the global map of energy exporting countries".

LNG Canada's five joint venture partners are Royal Dutch Shell (40%), Malaysia state-owned Petronas (25%), PetroChina (15%), Japan's Mitsubishi (15%) and Korea Gas (5%). It's the first major LNG project to receive a FID in several years after numerous projects worldwide were either canceled or postponed during the plunge in global oil and gas prices from 2014 to 2017.

Karen Ogen-Toews, CEO of the First Nations LNG Alliance, called the final investment decision "great news for the B.C. economy, for Canada, and for First Nations".

Natural gas is already B.C.'s biggest source of industrial carbon pollution.

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The C$40 billion ($31.2 billion) LNG project, approved by Shell and its partners Tuesday, will deploy roughly 140 massive steel modules sourced in China. The first liquefied natural gas from the project is expected before the middle of the next decade.

Skeena MLA Ellis Ross said on Monday night that the B.C. Liberals would probably vote in support of LNG Canada going ahead to avoid a possible deadlock by the B.C. Green Party in the B.C. legislature.

"Since then, market fundamentals have moved in the project's favour: LNG fundamentals have improved, upstream wells have outperformed, LNG construction costs have come down and tax breaks and import duty exemptions have been secured from provincial and federal governments, allowing the project partners to gain confidence, ultimately culminating in the announcement", Wang said.

It is the single largest private sector investment project in Canada's history.

Canada may need to take a different public policy approach to bitumen compared with LNG, said James Moore, a former industry minister and now a senior adviser at law firm Dentons Canada LLP.

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Weaver, whose three members of the Green party caucus have an agreement to support Horgan's New Democrat government, stood up in the legislature Tuesday and accused the NDP of being part of a "grand hypocrisy", for its criticism of past proposed LNG projects. The LNG facility will be built in Kitimat, a town in north-western British Columbia (BC). Petronas cancelled its own $36-billion Pacific NorthWest LNG project a year ago, in addition to projects cancelled by Nexen and AltaGas Ltd.

Notwithstanding, LNG Canada has a significant advantage over any USA based LNG project based either on the east or Gulf coast.

But as has been shown by the rise of shale gas in the United States, the death of coal in much of Europe and the ongoing declines in the cost of renewables, much can happen in the energy space in a relatively short space of time.

"(LNG Canada) is something which is definitely a positive sentiment boost for the industry", King said.

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