VANCOUVER (Reuters) - LNG Canada, a joint venture led by Royal Dutch Shell Plc, is aiming for an investment decision next year on building a liquefied natural gas (LNG) export terminal on British Columbia’s coast, its chief executive said on Thursday.
Andy Calitz said work on the up to C$40 billion ($31.79 billion) project is “extremely active” and has not been slowed by Malaysian oil company Petronas’ decision last week to scrap its LNG project in the Western Canadian province, nor by a recent change in provincial government.
“We want to be in construction in 2018 ... It means that you need to take a FID in 2018,” Calitz said, using the acronym for a final investment decision.
Last week, Shell CEO Ben van Beurden said that the project’s partners could look at an investment decision in the “next 18 months or so.”
The timing is ultimately up to the partners. Shell has a 50 percent stake, PetroChina Co. Ltd. owns 20 percent, and Japan’s Mitsubishi Corp. and South Korea’s Korea Gas Corp. each hold 15 percent.
Last year, the group delayed a final decision to find ways to reduce costs at a time when prices for the super-chilled gas were dampened by a global glut. They gave no new timeline for a decision.
Critics of LNG in British Columbia were quick to jump on Petronas’ project cancellation as the latest nail in the coffin for the industry, the centerpiece of the former Liberal government’s economic growth plan but which has been hit by weak prices. Only one project out of around 20 in the province has received a positive investment decision.
The future of LNG in the province remains unclear under the left-leaning New Democrat (NDP) government, which ousted the business-friendly Liberals in June. The NDP has vowed to halt an oil pipeline in the province, unsettling the energy industry.
Calitz said he has met with NDP officials and they have shown support for the LNG industry and the company.
LNG Canada was keeping a close eye on a proposed C$5 per year increase in the province’s carbon tax, which will add costs to the project, he said.
LNG Canada had initially worked with just one engineering consortia on the project but in January widened the field to four.
“I am hoping that the competition between themselves will reduce our plant cost by 20 percent,” Calitz said.
Reporting by Nicole Mordant in Vancouver; Editing by David Gregorio