TransCanada not giving up on LNG pipeline to northwest B.C.
Despite jittery market, company examines options for $6-billion Prince Rupert project
TransCanada continues to keep alive its $6-billion Prince Rupert Gas Transmission Project to transport natural gas from northeast B.C. by pipeline to the coast despite uncertain market and economic conditions.
Just two weeks ago, the megaproject received approval from the B.C. Environmental Assessment Office for an amendment to its project certificate for two additional main construction camps, and a standby compressor unit at each of its eight proposed compressor stations.
The proposed 900-kilometre pipeline was meant to feed the Petronas-led $11.4-billion Pacific NorthWest LNG project on Lelu Island near Prince Rupert that was cancelled five months ago.
“TransCanada continues to evaluate alternatives for the PRGT project and are completing matter-of-course permitting work that was underway prior to the Pacific Northwest project being cancelled in mid-2017,” TransCanada spokeswoman Doris Kaufman Woodcock said in a written statement Thursday.
The company has not said what alternatives there might be for the natural gas pipeline.
Two other LNG projects in the Prince Rupert area have also been cancelled.
Last September, Nexen Energy, the Calgary-based subsidiary of Chinese oil giant CNOOC Ltd., said it has decided with Japanese partner INPEX Gas British Columbia Ltd. to pull the plug on the $28-billion Aurora LNG project.
In March 2017, Shell announced it was cancelling the Prince Rupert LNG project, which it inherited from the BG Group when it purchased the company in 2015 for $70 billion.
The former B.C. Liberal government had great hopes for starting a new natural gas export industry, tapping the province’s robust gas resources and sending them to Asia. The new NDP government has also said it will support an LNG industry.
However, the projects, including others proposed in Kitimat in northwest B.C., faced delays as the province worked out a new policy and regulatory structure for the LNG export industry. The projects also ran headlong into challenges such as a reduction in available capital because of low oil prices, increased global LNG supply coming on stream and lower natural gas prices in a jittery global economy.
There remains one project on the books in the Prince Rupert area, the ExxonMobil-led WCC LNG project, estimated at a cost of $25 billion, which is still in the preliminary stages of planning and environmental application.
WCC LNG has said that with the current LNG market conditions and economic uncertainties, it will continue to assess its proposed project schedules and plans. Throughout 2018, WCC LNG will be moving at a slower pace, the company says.
WCC has not named a dedicated provider to deliver gas to its facility.
The two projects in Kitimat — Shell-led Canada LNG project and Chevron-led Kitimat LNG — also are continuing to keep their projects alive in hopes of better market and economic conditions. Both are to be fed by separate planned pipelines.
In seeking amendments to its Prince Rupert Gas Transmission pipeline, TransCanada said in its application that the additional camps were needed to better align with the construction and prime contractor sections now being considered for the project.
The additional camps will increase the project footprint up to 53 hectares. The total number of workers at construction camps will increase by 200.
In southwest B.C., the much smaller $1.4-billion Woodfibre LNG project has also been looking at ways to trim costs.
Woodfibre recently hired Houston, Texas-based, KBR Inc. to continue work on front-end engineering for the proposed project near
Squamish, as well to carry out “cost optimization” and put together a plan for an engineering, procurement and construction contract. “We look forward to reaching our next project development milestone — the awarding of an EPC contract in 2018,” said Byng Giraud, Woodfibre’s vice-president of corporate affairs.
TransCanada has not said what options there might be for its Prince Rupert pipeline project.