BRITISH COLUMBIA WELL ACTIVITY JAN/12
JAN/13
Wells licensed
JAN/12
JAN/13
Wells spudded
JAN/12
JAN/13
Rigs released
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▼
B.C. British Columbia
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Source: Daily Oil Bulletin
NEB approves third LNG export licence By Richard Macedo
Photo: Global Security
The National Energy Board (NEB) gave the green light to an export licence for LNG Canada Development Inc.’s planned project to ship liquefied natural gas (LNG) overseas from a proposed facility near Kitimat, B.C., in late January. This is the third export licence granted by the board. Out of the gate first in getting the nod was Kitimat LNG (KM LNG), which will be led by Chevron Corporation and includes Apache Corporation, each 50/50 partners. The NEB also has approved BC LNG Export Co-operative LLC’s 20-year licence to export LNG from Canada to the Pacific Rim. This would be a smallerscale project near Kitimat. And the board approved LNG Canada’s application for a licence to export LNG from a proposed terminal near Kitimat. T he ter m i na l is c ur rent ly bei ng de veloped under a joint development agreement among Shell Canada Limited, as managing partner of Shell Canada Energy, Diamond LNG Canada Ltd. (an
affi liate of Mitsubishi Corporation), Kogas Canada Ltd. (an affiliate of Korea Gas Corporation) and Phoenix Energy Holdings Limited, which is an affiliate of PetroChina Investment (Hong Kong) Limited. While Shell currently owns 100 per cent of LNG Canada, these parties intend to enter into a shareholding agreement whereby each will own shares in LNG Canada. “Shell welcomes the decision as a key milestone in the LNG Canada project to transport abundant Canadian natural gas to the fast-growing economies of Asia,” said Shell spokesman David Williams. LNG Canada launched in May 2012 and the export licence was filed in July. TransCanada Corporation was selected by Shell and its partners to design, build, own and operate the proposed Coastal GasLink project, an estimated $4-billion pipeline that will transport natural gas from the Montney gas-producing region near Dawson Creek to the LNG Canada export facility.
The Arctic Princess LNG tanker at work. Three LNG export licences have been granted by the NEB.
The next step for the LNG project is for proponents to file a project description, which starts the full regulatory/environmental approval process. Front-end engineering and design work will also be done. A fi nal investment decision is expected by mid-decade, and the project could be on stream by the end of the decade. The export licence will authorize LNG Canada to export 670 million tonnes of LNG (approximately equivalent to 32.95 trillion cubic feet of natural gas) over a 25-year period. The maximum annual quantit y allowed for expor t w ill be 24-million tonnes of LNG (approximately equivalent to 1.18 trillion cubic feet of natural gas, or 3.23 billion cubic feet per day).
33
trillion cubic feet
Amount of gas LNG Canada is licensed to export over 25 years
In approving the application, the board said it has satisfied itself that the quantity of gas to be exported does not exceed the surplus remaining after “due allowance has been made for the reasonably foreseeable requirements for use in Canada, having regard to the trends in the discovery of gas in Canada.” “I think it is good that the NEB has carefully assessed the information, studies and strategies put forth by the proponents, and in my opinion, the NEB has come forward with a very encouraging signal—not only for this LNG export project and the earlier approved two LNG export [licences]; rather, this is a solid forward step for the entire western Canada gas industry,” said Bill Gwozd, senior vice-president of gas services at Ziff Energy Group. Edward Kallio, director, gas consulting, with Ziff Energy Group, noted that LNG OIL & GAS INQUIRER • MARCH 2013
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