June 28, 2018 / 6:03 PM / 4 months ago

LNG Canada says local support has cut risk of delays, overruns

WASHINGTON, June 28 (Reuters) - A strong stakeholder engagement program at a liquefied natural gas export plant on Canada’s West Coast has helped pare the risk of delays and cost overruns for the C$40 billion ($30.1 billion)project, a project executive told Reuters.

LNG Canada, currently being reviewed by its joint venture partners ahead of a final investment decision, has focused hard on ensuring government, indigenous people and local communities are on board with the project, Susannah Pierce, LNG Canada’s director of external relations, told Reuters late on Wednesday at the triennial World Gas Conference in Washington, D.C.

Strong environmental and First Nation opposition to energy projects has hurt investor confidence in Canada in recent years. Malaysia’s Petronas last year walked away from its Pacific NorthWest LNG project, which was fiercely opposed by local indigenous groups.

“I think what industry is figuring out is: it’s not that we can’t design projects from a technical perspective. What’s slowing them down, or what’s not allowing them to be delivered on time or on budget, is the stakeholder issue,” Pierce said.

LNG Canada has been endorsed by its local First Nation community and enjoys strong support within the host town of Kitimat, British Columbia. The province has also backed the project, offering tax cuts and power perks.

The associated pipeline, meanwhile, announced this week C$620 million in construction contracts awarded to First Nation groups along the route.

“All of these things are lining up to show that there is the stakeholder support that our joint venture participants should feel confident in in making a decision to move the project forward,” Pierce said.

LNG Canada is a joint venture between Anglo-Dutch giant Royal Dutch Shell Plc, Malaysia’s Petronas, PetroChina Co Ltd, Mitsubishi Corp and Korea Gas Corp. TransCanada Corp is building the pipeline.

Pierce added that the partners had been reviewing the final project package for the last six months and LNG Canada remains hopeful that construction will be underway before year end. A final investment decision is expected in the second half of 2018. ($1 = 1.3284 Canadian dollars) (Reporting by Julie Gordon in Washington, D.C. Editing by Chizu Nomiyama)

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