At a sprawling construction site in northern British Columbia, LNG Canada chief executive officer Chris Cooper points out the finishing touches being made at the terminal that will soon be exporting liquefied natural gas. With extra insulation installed over here and new cladding added over there, the finish line is finally within sight, more than 12 years after the joint venture received its export licence. The $18-billion export terminal is now more than 98 per cent completed after nearly seven years of construction, and the first LNG shipment from Kitimat, B.C. , is slated to set sail to Asia by mid-2025. “We’re actually leading the way on a new industry and we’re helping Canada to diversify its export markets – and that’s a huge deal,” Mr. Cooper said in his first media interview since becoming CEO on April 1. With a hard hat and safety glasses on, he is dwarfed by the towering energy equipment and the network of pipes surrounding him at what will be Canada’s first LNG export terminal . One of the largest industrial projects ever constructed in Canada has risen on the 400-hectare site, a huge footprint equivalent in size to Vancouver’s popular tourist attraction, Stanley Park. Chris Cooper, a global energy specialist who joined LNG Canada in late 2021 and became CEO in April this year, says the company is helping Canada to diversify its export markets. From various vantage points across Kitimat, residents can see LNG Canada’s flare stacks that have been used to burn off natural gas during the commissioning process. Within weeks, LNG produced in Kitimat will start being loaded onto Asia-bound ships that will be docked at the wharf at the head of Douglas Channel, an inlet lined with rolling coastal mountains. U.S. President Donald Trump has repeatedly asserted that the United States has plenty of resources, including natural gas, and he claims that the U.S. doesn’t need what Canada has to offer. But Canada, the world’s fifth-largest natural gas producer, exported 45 per cent of its gas supplies last year south of the border. As the trade war escalates, the Canadian energy industry is looking to LNG Canada as a promising sign that the country is capable of shipping its resources to new markets and reducing its economic dependence on the United States. “We see this kind of Canadian movement of standing together and actually taking control of what we want to do with our natural gas in Canada,” Mr. Cooper said. “That diversification of Canada’s gas into Asia is a big advantage for Canada, and the timing is very important.” During the federal election campaign, both the Liberals and Conservatives underscored the importance of the project’s possible Phase 2 expansion, which would double the plant’s capacity to 28 million tonnes a year. Prime Minister Mark Carney is striving to carry out his campaign pledge to make Canada an energy superpower globally, aiming to boost conventional energy production while also spurring the transition to renewables. LNG Canada could help him fulfill part of the pledge on the conventional side. Shell PLC SHEL-N and the four co-owners of LNG Canada are considering whether to approve Phase 2. London-based Shell owns 40 per cent of LNG Canada. Malaysia’s state-owned Petronas acquired its 25-per-cent stake in 2018. The other participants in the venture are PetroChina and Japan’s Mitsubishi Corp. (each with a 15-per-cent stake) and South Korea’s Kogas (5 per cent). The decision on whether to expand is expected next year, and if there is a green light from the co-owners, the Kitimat plant at full tilt would rank among the world’s largest facilities for LNG export capacity. Canada remains far behind the United States in constructing and opening LNG export terminals. The first LNG export facility in the lower 48 states began operating in 2016 and another seven U.S. sites have opened since then. Mr. Trump has been touting Alaska LNG as a promising proposal to reach Asian markets. The United States, Australia and Qatar were by far the world’s largest LNG exporters last year. Russia ranked fourth, followed by Malaysia. A report last year by Clean Energy Canada, a think tank at Simon Fraser University, said the focus on fossil fuels such as LNG ends up delaying the global transition to renewables such as wind and solar. However, global energy demand is forecast to surge over the next 25 years from increases in population, including in developing countries. “That energy addition drives the need for, in general, more energy from all sources,” said Teresa Waddington, LNG Canada’s vice-president of corporate relations. “Our chance with Phase 2 to truly put Canada squarely on the map in terms of an LNG exporting nation with significant capacity is really exciting.” An era of major projects in British Columbia is winding down as LNG Canada’s first phase nears completion, and attention is turning to what the future might hold. Other large projects that have wrapped up in the past couple of years in B.C. include the Trans Mountain oil pipeline expansion and Coastal GasLink. Calgary-based TC Energy Corp. TRP-T owns 35 per cent of Coastal GasLink and is the operator of the 670-kilometre pipeline for natural gas that stretches from northeast B.C. to Kitimat. The Site C hydroelectric dam in northeast B.C. is scheduled to be fully in service later this year. The energy spotlight is shifting to prospects such as Ksi Lisims LNG, a proposal backed by the Nisga’a Nation. Floating production facilities are scheduled to be opened by Ksi Lisims on Pearse Island on B.C.’s North Coast in 2029, with other vessels exporting LNG to Asia. But Ksi Lisims must first undergo an environmental review. Earlier this year, the B.C. government loosened its net-zero rules for Ksi Lisims and other proposals to export LNG from the province, given uncertainty over how long it will take for new hydroelectricity supplies to be added to the grid. Other energy proposals in B.C. include FortisBC’s expansion plans at its domestic Tilbury LNG site in Delta and Summit Lake PG LNG near Prince George. The B.C. government’s budget tabled in March highlighted how the provincial economy already has become more reliant on natural gas than the traditional dependence on the forestry sector, which has been slumping. Mr. Cooper, a global energy specialist who rose through the ranks at Shell, joined LNG Canada in late 2021. He took over last month as the project’s CEO, replacing Jason Klein, who returned to his home state of Texas after three years at the helm of LNG Canada. “We’re proud to be a catalyst for a thriving new energy business,” Mr. Cooper said. “Our gas goes to Asia to benefit them, but there are a lot of benefits in B.C. as well.” The much-anticipated rise of LNG in B.C. has been a long time coming. Pacific NorthWest LNG, led by Petronas , cancelled its project near Prince Rupert, B.C., in 2017 after struggling to navigate various environmental issues. The co-owners of LNG Canada, including Petronas, made the final investment decision in the fall of 2018 to forge ahead with construction of the export terminal in Kitimat. It marked a breakthrough for the country’s energy sector after years of failed or stalled proposals. Back in 2013, there were more than 20 LNG proposals in British Columbia. Today, only LNG Canada and two smaller B.C. projects – Woodfibre LNG near Squamish and Cedar LNG in Kitimat – are under construction. Woodfibre plans to start exporting to Asia by late 2027 while Cedar is aiming to begin shipping to Asia by late 2028. “Less dependence on the U.S. is a good thing, for sure,” said Ron Burnett, president of the Kitimat Economic Development Association. There is a diversity of viewpoints among Indigenous groups over the fledgling LNG industry in B.C. The Coastal GasLink pipeline across northern B.C. will supply natural gas to LNG Canada and Cedar, which are situated in Kitimat on the traditional territory of the Haisla Nation. TC Energy CEO touts Asia as key to Canada’s economic diversification away from U.S. Crystal Smith, the Haisla’s elected chief councillor who is also chair of the First Nations Natural Gas Alliance, said Haisla leaders opposed the now-defunct Northern Gateway oil pipeline proposal from Alberta to Kitimat, but they support LNG as a fuel that will be safe to transport. “The community support had a lot to do with, definitely, the commodity that was being proposed for our territory, when it came to the impacts of LNG being exported through our waters,” said Ms. Smith, who will be seeking re-election in July. The Haisla own 50.1 per cent of Cedar, while Calgary-based Pembina Pipeline Corp. holds 49.9 per cent. Cedar will use electricity from BC Hydro for powering electric motors that drive compressors for liquefaction on a floating production vessel. Cedar will rely on upgrades to an existing transmission line for hydroelectricity. The construction of LNG Canada has led to much-needed revenue for the Haisla through benefits agreements, and sparked economic development in the Kitimat area, notably on the Haisla’s main reserve of Kitamaat Village. The construction of LNG Canada has led to much-needed revenue for the Haisla Nation and has sparked local economic development, notably in Kitamaat Village, where an affordable-housing complex is among the new buildings. New buildings in Kitamaat Village include a youth centre, a health facility and an affordable-housing complex with 23 units. The First Nations Natural Gas Alliance, an Indigenous group that formed in 2015, believes that resource development will be crucial for economic reconciliation. The alliance supports tapping into abundant reserves of natural gas in northeast B.C. and transporting the commodity to the West Coast, viewing LNG as a crucial part of creating prosperity in Indigenous communities. First Nations that have endorsed LNG Canada include the Haisla, Kitselas, Kitsumkalum, Gitxaala and Gitga’at. But a group of Wet’suwet’en Nation hereditary chiefs has led a campaign opposing the contentious Coastal GasLink project, the first export pipeline for natural gas across northern B.C. A second pipeline, needed to supply Ksi Lisims, is called the Prince Rupert Gas Transmission (PRGT) project, which is co-owned by the Nisga’a and Western LNG. B.C. Environment Minister Tamara Davidson is expected to rule on the fate of PRGT this spring after she reviews arguments, including from climate activists opposed to it. The Skeena Watershed Conservation Coalition and allies, including the Gitanyow Nation and several Gitxsan Nation leaders in the region, have warned about the climate impacts of PRGT and Ksi Lisims. That includes greenhouse gas emissions stemming from methane leaks in the production of natural gas through fracking in northeast B.C. Building LNG Canada’s export terminal has been a test of stamina. At the peak of construction last year, the project required more than 9,000 workers on rotation in Kitimat, including room for 4,500 people at any given time at the on-site accommodation centre called Cedar Valley Lodge. There were still about 7,500 workers recently helping to finish the remaining bits and pieces of equipment. The District of Kitimat itself has nearly 9,000 year-round residents. A vessel, the Maran Gas Roxana, spent four weeks at the Kitimat site this spring, unloading imported LNG as part of the equipment-testing and cool-down process at the terminal. The first phase of LNG Canada will rely on natural gas-fired turbines. High-efficiency turbines using Baker Hughes “aeroderivative” technology will help supercool natural gas into liquid form. LNG Canada, which has a 40-year export licence, will employ up to 350 workers during operations. The project‘s first phase will have two “trains,” or separate LNG cooling processes. Each train is designed to handle seven million tonnes a year of LNG exports to Asia. The new terminal is aiming to perform better than the B.C. government’s standard for “emissions intensity,” targeting 0.15 carbon dioxide equivalent tonnes for each tonne of LNG produced – below the government’s limit of 0.16. JGC Fluor BC LNG JV, a joint venture between JGC Corp. and Fluor Corp., is the project’s engineering, procurement and construction contractor. Large modules originated from the Qingdao fabrication yard in China for installation in Kitimat, while smaller units came from the Zhuhai facility, also located in China. The total cost of building the first phase 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 prolific North Montney region of northeastern B.C. Increased supplies of hydroelectricity would be required if Phase 2 is to eventually switch to electric motors for driving the compressors needed to liquefy natural gas. But the proposed North Coast transmission project by BC Hydro for twinning the B.C. line between Prince George and Terrace could take a decade to complete. In the meantime, LNG Canada is fully permitted to use natural gas-fired turbines for liquefaction for both Phase 1 and Phase 2. For Kitimat , LNG Canada represents new beginnings. The new export terminal is on the former site of a methanol plant that was closed in 2006 by Methanex Corp. The marine terminal for LNG vessels used to be a wharf that formerly belonged to the Eurocan pulp and paper mill that West Fraser Timber Co. Ltd. shut down in 2010. “We’ve had some hard times. When Eurocan and Methanex closed within a few years of each other, that was a tough time,” Kitimat Mayor Phil Germuth said. He spoke in a meeting room at the District of Kitimat’s municipal offices located on the third floor of City Centre Mall, which sits between neighbourhoods of suburban houses. Along the waters of Douglas Channel, LNG Canada’s industrial neighbour is Rio Tinto PLC’s RIO-N aluminum smelter. Rio Tinto employs more than 1,100 workers in the Kitimat region. Kitimat was carved out of the wilderness in the early 1950s by Rio Tinto’s predecessor, Alcan, when it built an aluminum smelter and a hydroelectric dam to power it. While U.S. tariffs on Canadian aluminum have sparked much uncertainty and anxiety, Rio Tinto insists that it will maintain a calm approach to its business strategy. “We can control what’s in our sphere of control, which is safe operations,” said Simon Pascoe, general manager at Rio Tinto’s Kitimat smelter. With the nascent LNG industry in Canada, the hope is that Asian fuel buyers will be enticed by the shorter shipping route from B.C., compared with the U.S. Gulf Coast. It takes roughly 10 days for a ship to sail from Kitimat to North Asia, versus 20 days from U.S. Gulf Coast, via the Panama Canal. LNG exports from B.C. to Asia would indirectly help Europe because that frees up LNG supplies elsewhere in the world to be rerouted to Europe. Bryce Mathew Watts, executive director of the Kitimat Museum and Archives, said residents know the economic stakes are high with Rio Tinto’s local smelter, LNG Canada’s expansion potential and Cedar’s construction. “Everyone understands what puts food on our tables,” Mr. Watts said. “There have been good years and bad years, so with new resources coming through, it diversifies and gives us more life as a community.” The museum already has displays to show Kitimat’s roots in the aluminum industry. The next chapter in local history to be documented will be LNG, now part of a broader tale of Canada’s quest to wean itself off economic reliance on the United States.
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