LNG Canada is mulling expanding operations that could double the plant’s capacity to 28 million tonnes a year.Robin Rowland/The Globe and Mail
A ship has left B.C. for Asia with the first load of liquefied natural gas from the new LNG Canada terminal, ushering a new era in energy exports at a time when Canada seeks to diversify markets away from the United States.
The GasLog Glasgow arrived on Saturday in Kitimat in northern British Columbia, nearly seven years after the export terminal’s construction began. The tanker departed from Kitimat on Monday, embarking on the journey across the Pacific Ocean.
Shell PLC-led RYDAF LNG Canada, the country’s first export terminal for the fuel, is mulling expanding operations that could double the plant’s capacity to 28 million tonnes a year.
“We continue to explore pathways with our partners for a potential Phase 2. There are no guarantees at the minute,” LNG Canada chief executive officer Chris Cooper said in an interview.
Factors being considered include how to deal with greenhouse-gas emissions caps envisaged by the federal and B.C. governments.
“That really needs all of those things to come together on competitiveness, affordability, GHG policy,” said Mr. Cooper, who likened the Phase 2 review process to putting together a jigsaw puzzle.
First cargo ship to depart for Asia from LNG Canada export terminal
Shell to add up to 12 million tons of additional LNG capacity by 2030
The cost of building the first phase of the project has been pegged at $48.3-billion, including the $18-billion Kitimat terminal, the $14.5-billion Coastal GasLink pipeline and other infrastructure, as well as annual budgets for drilling in the North Montney region of northeastern B.C.
Once the Kitimat terminal’s first phase is in full swing, there will be about 170 vessels a year transporting LNG to Asian markets.
“A reliable supply of responsibly produced energy can never be taken for granted,” Mr. Cooper said. “We’re just very proud to be leading the way on a new industry for Canada at scale, and one that’s helping Canada diversify its export markets.”
LNG Canada received its export licence in 2013 and started building the Kitimat terminal in 2018: “Something that takes over a decade to deliver, you know it takes real staying power,” Mr. Cooper said.
In contrast to LNG Canada starting up, the first LNG export facility in the U.S. mainland began operating in 2016, and another seven U.S. sites have opened since then.
Climate activists and environmental think tanks say the world needs to focus on renewable energy, not on fossil fuels such as LNG.
The LNG tanker GasLog Glasgow clears the dock at the LNG Canada facility in Kitimat, B.C., on Monday. The tanker is carrying LNG Canada's first export of liquefied natural gas to Asia.Robin Rowland/The Globe and Mail
“Any further investment in LNG means doubling down on a volatile industry that is already showing signs of oversupply,” said Nichole Dusyk, senior policy adviser at the International Institute for Sustainable Development, in a news release last week.
But political leaders issued statements through LNG Canada to mark the occasion of the ship’s Monday departure.
“With LNG Canada’s first shipment to Asia, Canada is exporting its energy to reliable partners, diversifying trade and reducing global emissions – all in partnership with Indigenous peoples,” Prime Minister Mark Carney said.
B.C. Premier David Eby said: “It’s more important than ever that we get our resources to global markets and reduce our reliance on the United States.”
At the peak of construction in 2023, the project required more than 9,000 workers on rotation at the Kitimat industrial site located on the Haisla Nation’s traditional territory. LNG Canada will employ up to 350 workers during operations.
“This milestone is a testament to what can happen when industry elevates and respects the role of Indigenous communities in major projects,” said Crystal Smith, who has served as Haisla chief councillor since 2016 but will not be running for re-election in July.
There will be about 170 vessels a year transporting LNG to Asian markets once the Kitimat terminal’s first phase is in full swing.Robin Rowland/The Globe and Mail
Shell is the largest partner in LNG Canada, with a 40-per-cent stake, followed by Malaysia’s Petronas at 25 per cent. The other co-owners are PetroChina (15 per cent), Japan’s Mitsubishi Corp. (15 per cent) and South Korea’s Kogas (5 per cent).
“LNG Canada is a testament to how responsible energy development can create lasting and positive impacts for local communities and First Nations while delivering essential energy to the world,” said Cederic Cremers, Shell’s president for integrated gas, in a statement.
Executives at Petronas, PetroChina, Mitsubishi, Kogas and TC Energy Corp. also issued statements to congratulate LNG Canada on the first cargo shipment.
TC Energy, the operator of Coastal GasLink, owns 35 per cent of the contentious pipeline project that stretches from northeast B.C. to Kitimat.
“Canada has at last achieved this milestone thanks to LNG Canada and its joint venture partners, and Coastal GasLink,” TC Energy chief executive officer François Poirier said. “This is just the beginning of Canada’s LNG journey.”
Other LNG projects that remain active in B.C. include Woodfibre LNG, Cedar LNG, Ksi Lisims LNG and Tilbury LNG.
The domestic Tilbury plant in Delta is a small-scale operation that briefly exported a small amount of LNG in containers to Asia.
The GasLog Glasgow arrived in Kitimat on Saturday, before departing on Monday to embark on the journey across the Pacific Ocean.HO/The Canadian Press