Kitsault seeks OK to export LNG from B.C.

Kitsault Energy Ltd. has applied to federal regulators to export 20 million tonnes of liquefied natural gas per year from the site of an abandoned mining town on Canada’s West Coast, joining much bigger companies looking to tap B.C. shale gas for delivery to overseas markets.

Privately held Kitsault Energy, which has been shopping for partners to develop a $35-billion US pipeline and gas megaproject about 800 kilometres north of Vancouver, is seeking permission to export up to 2.6 billion cubic feet of gas per day for 25 years starting in 2018 using a combination of floating and landbased LNG infrastructure, it said this month in a regulatory filing.

The project would be located at the town of Kitsault, north of Prince Rupert on Alice Arm, which was constructed in the early 1980s by U.S. mining conglomerate Phelps Dodge.

Kitsault Energy does not own any gas reserves, and supply arrangements for the proposed export plant have not been finalized, it said in the application.

The company, which is registered in Ontario, is wholly owned by its president, Krishnan Suthanthiran, an Indo-Canadian businessman who built up a fortune selling medical supplies throughout North America.

Suthanthiran bought the recently-abandoned ghost town in 2005 with plans to turn it into some form of eco-retreat, refuge or resort. In 2013, he began floating the idea of turning the remote location into a WestCoast energy-export hub.

Kitsault Energy, despite having no partnerships in place, aims to make a final investment decision by the end of 2014, said Michael Williamson, director of LNG projects with the outfit. He said the company has held discussions with potential customers and partners, but declined to provide details.

“We believe that Kitsault Energy is a very credible, competitive proponent and will be among the first to export LNG” from Canada’s West Coast, he said Monday from Victoria.

The venture is already playing catch-up to rival export schemes.

The National Energy Board this month issued a raft of export permits to BG Group PLC, ExxonMobil Corp. and Imperial Oil Ltd., Petroliam Nasional Bhd and a smaller venture backed by Indonesian tycoon Sukanto Tanato’s Pacific Oil and Gas Co.

None of the LNG projects proposed for the B.C. coast has been built or even officially committed to by their corporate sponsors, and the federal government must still sign off on the most recent batch of export authorizations.

The Canadian arm of Chinese state-owned CNOOC Ltd. is also seeking permission from regulators to export gas from the West Coast.