VANCOUVER (Reuters) - The chief executive of the LNG Canada project on British Columbia’s northern coast said on Tuesday that the company was committed to starting construction on the C$40 billion ($31.1 billion) liquefied natural gas export project this year.
An investment decision on the terminal was delayed in 2016, due to sagging oil prices that hit cash flows, along with an unfavorable supply-demand outlook, but remains on track for 2018, Andy Calitz said at an LNG conference on Tuesday.
“It didn’t make sense in July 2016,” he said. “When (our stakeholders) asked the inevitable question, when will you reconsider the FID? Our answer was: We will be in construction in 2018. I reaffirm that commitment today.”
Calitz later told reporters that a trade spat over imported fabricated industrial steel components (FISC) was no longer an issue for the project and would not have any impact on an investment decision by the joint venture partners.
LNG Canada had asked Canada’s Finance Ministry to exempt it from the 45.8 percent anti-dumping tariffs, which apply to certain FISC components imported from Spain, South Korea and China. LNG trains, most of which are built in Asia, are FISC components.
Calitz did not make clear why the FISC duties were no longer an issue, but said the modules have been contracted and the company has more clarity on the parameters and legal application of the tariffs.
LNG Canada is a joint venture between Royal Dutch Shell Plc (RDSa.L), PetroChina Co Ltd (601857.SS), Mitsubishi Corp (8058.T) and Korea Gas Corp (036460.KS). TransCanada Corp (TRP.TO) will build the pipeline.
Reporting by Julie Gordon in Vancouver; Editing by Richard Chang and James Dalgleish