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The Shell-backed LNG project in B.C. received environmental approval for its four-train LNG terminal

LNG Canada, a consortium led by Shell (ticker: RDSA) with Asian partners including PetroChina (ticker: PTR) and Mitsubishi Corp, received approval for its LNG project in Kitimat, British Columbia today, according to the Canadian Environmental Assessment Agency.

The project is expected to produce 2 Bcf/d of LNG on the site of the former Methanex methanol plant, according to the Kitimat economic development website. Shell holds a 50% interest in the project, with PTR holding 20%, and Mitsubishi and the fourth partner, KOGAS, holding 15% each. The project is expected to create 400 to 800 permanent jobs. Investment could reach as high as C$40 billion.

Natural gas

Source: Gazprom LNG Storage Tanks

The group still has to determine the economic viability of the project before moving ahead with a Final Investment Decision (FID), but has the preliminary support of local First Nation groups. Working with First Nation groups has presented a challenge for several LNG projects in B.C., including for Pacific NorthWest LNG, which recently announced a conditional FID decision as it continues to work with First Nation groups regarding the project’s environmental impacts.

Susannah Pierce, LNG Canada’s external affairs director, said the consortium is optimistic about working cooperatively with the local Haisla First Nation group. “There will be opportunities for the Haisla and other First Nations to be a part of the construction and at some point the long-term operations,” she said.


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