LNG Canada project would provide new market, executive says

BANFF, Alta. — A positive final investment decision for LNG Canada could eventually encourage other projects to follow suit, creating demand needed to soak up Western Canada’s glut of natural gas, producers say.

The projects would eventually provide a market for gas companies that are now discouraged from increasing production by low prices linked to fierce U.S. competition and Canadian pipeline capacity shortfalls, said Steve Laut, executive vice-chairman of Canada’s largest natural gas producing company, Canadian Natural Resources Ltd. of Calgary.

“If you get one plant through, there will be a second and third plant that will follow much easier, and that makes a difference,” he said after participating in a panel discussion at the Global Business Forum in Banff, Alta. “I think it gives confidence to the other proponents; they can see they can get through the process.”

Published reports have suggested LNG Canada, an estimated $40-billion gas liquefaction plant and pipeline that was delayed in 2016, could be officially sanctioned as early as next week. Unconfirmed reports also suggest the federal government has agreed to waive import tariffs on steel plant modules built overseas that were estimated to add $1 billion to the cost.

But Susannah Pierce, director of external relations for the Kitimat-sited project, wouldn’t say Friday after taking part in the panel discussion whether those reports are true.

She repeated the official line that the partners – Royal Dutch Shell, Mitsubishi Corp., Malaysia’s Petronas, PetroChina Co. and Korea Gas Corp. – will make a decision before the end of this year.