Rio Tinto Alcan | Northwest Coast Energy News

After the earthquake: Kitimat must immediately upgrade its emergency communications

As a 7.7 magnitude earthquake hit off Haida Gwaii shortly after eight o’clock on Saturday, I was at the Haisla Recreation Centre as the Haisla Nation marked the return of the G’ps Golox totem pole. Like a boat being lifted by gentle waves, the Rec Centre began to quietly roll up and down, then the rolling seemed to accelerate just a bit. I realized that it was an earthquake. As I told CBC’s Ian Hanomansing later in the evening, I have been in a number of earthquakes, and for me at least, this quake, at least at Kitamaat Village, the rec centre was not shaking as badly as in some of the others I have felt.

The subsequent events of the evening show that the emergency communication system in Kitimat needs immediate improvement.

Cell service

Cell phone service at the village is poor and after the rolling stopped neither myself nor my Kitimat Daily colleague Walter McFarlane was able to get “bars.”

Now as a former network producer for both CBC and CTV I have handled a large number of earthquake stories from around the world over the past quarter century (sitting at a desk, I should add). With that experience, I was hoping to get a cell hit at the village so I could bring up Twitter. I already subscribe to the US Geological Survey and Canadian earthquake alert feeds. The US and Canadian computers automatically report earthquakes within seconds of detection and send out a Twitter bulletin as the same time as those computers are alerting their human masters. If I had been able to get cell service I would have known within minutes that the Haida Gwaii earthquake was a major event. (I did follow the alerts from my computer once I got back to Kitimat itself).

Recommendation One. Cell service in Kitimat, Kitamaat Village, the harbour area must be upgraded as soon as possible. Telus has applied to council to erect a new cell tower here. Given the events of the past 24 hours, District Council should make sure that all parts of the District of Kitimat and the Haisla Nation have proper cell coverage no matter what service one subscribes to, not just for the convenience of subscribers but for emergency situations.

Automatic alerts

With experience one knows that in a situation such as Saturday night, the official websites such as the US Geological Survey and the Pacific Tsunami Warning Center as well as Natural Resources Canada are often overwhelmed. That is why the media use RSS feeds, Twitter feeds and e-mail alerts. It is also important to realize that these emergency organizations have their own language and procedures. It appears that a lot of the confusion on Saturday came from misinterpretation of the various Canadian and US warning systems.

Recommendation Two. If Kitimat emergency services are not familiar with how the US based earthquake and tsunami centres work, they should be trained in those systems, simply because the Americans are well ahead of Canada in these areas because the alerts go out by computer automatically and are constantly updated and as Saturday night showed, are often quicker and farther ahead than the Canadian systems.

Once I was back in Kitimat, it was clear that communications were breaking down, and this was at a time the tsunami warning was still active. There were numerous messages on Twitter and Facebook, from residents of Kitimat either trying to find out what was going on or retweeting/reposting rumours including one that the Kildala neighbourhood was being evacuated. I am told that residents were calling the RCMP to ask what was going on. This was another breakdown since North District HQ in Prince George handles all police services in this region and were likely busy with quake calls on Haida Gwaii, so that information calls in Kitimat that should have been handled by an emergency services public communications person were being handled the Mounties.

There were reports that one man was going door to door in Kildala telling people to evacuate. Whether this person was well intentioned but misinformed or a imposter intent on mischief doesn’t matter, there was an information vacuum.

It was clear from Twitter that other districts and municipalities were using that service to spread official information. (I don’t follow other areas on Facebook so it is unclear if information was being posted on Facebook. There was certainly no official presence from Kitimat on Facebook Saturday night.) It appears from reports in the Kitimat Daily and tweets about the Northern Sentinel that Kitimat emergency services was sending information out by fax. While faxing information was an advance in the 1980s, faxes are obsolete in 2012. Many major newsrooms no longer use fax machines after being inundated by junk faxes and after they laid off all the editorial assistants who would have cleared those fax machines (even by the late 90s most faxes were dumped in the garbage unless the EA had been told to look for a specific fax). Also though it is now more than two years since I returned to Kitimat and I regularly freelance for Global, CBC and Canadian Press, I had no contact from anyone in emergency services (also I don’t have a fax machine).

Recommendation Three: The District of Kitimat must immediately bring its emergency communications into the 21st century, with Twitter accounts, a Facebook page and an emergency e-mail or text message plan for media and other officials who can get the messages. ( A number of jurisdictions already use text messages for emergency alerts at various graduated levels, official, media, public). When the main means of communication today is social media, an emergency organization can no longer follow outdated procedures, an organization must be on social media immediately it becomes clear that there is an emergency (as we are seeing with all the official tweets with the Hurricane Sandy crisis on the east coast)

CFTK

In an emergency situation, local radio and television are vital to communications and letting people know what is going on.

CFTK did a much better job on March 27. 1964 after Kitimat felt the magnitude 9.2 Good Friday Anchorage earthquake than it did on the weekend with the Haida Gwaii earthquake.

The inadequate coverage of the quake was certainly not the fault the of the current CFTK news staff who were working hard (probably on their own time and unpaid) keeping Twitter updated with what they knew. The fault lies with corporate management across the media which these days doesn’t want to spend the money and resources and training to fulfill the public service portion of their broadcast licence mandate.

(There was a similar breakdown in the May 2000, Walkerton, Ontario e-coli crisis where the local medical officer of health was initially unable to alert the public because local radio wasn’t staffed on the weekends–the local stations were taking satellite feeds from their corporate headquarters)

In 1964, long before satellites, when the microwave towers that joined CFTK to the Canadian networks were still being built, the staff of CFTK, then, of course under local management, went to a live special within an hour of the Anchorage quake being felt far off from Alaska in Kitimat. The CFTK anchors were keeping its audience updated with “rip and read” wire copy, a camera on an atlas for a map and phone interviews.

In contrast, on this Saturday night, CFTK was taking the CBC BC network feed which was a hockey rerun (hardly a show that attracts major audience numbers and certainly not a vital broadcast) until the CBC management in Vancouver decided to go to full network news special.

Since CFTK is the station that broadcasts not only to Kitimat, but to Haida Gwaii as well, CFTK should have been ahead of Vancouver on this story, called in its staff and mounted their own live special, joining the CBC feed when it began but, as on an election night, breaking away for local news when justified. CFTK has a responsibility under its licence from the CRTC to provide that service to the northwestern region, not just sending what ad revenue it generates back to Astral.

Rio Tinto Alcan

Another question that must be asked in this situation is where was Rio Tinto Alcan on Saturday night? In all areas that were under a tsunami warning the first scrutiny and clue if there was to be a problem is that region would be found by observing what has happening between the low tide line and the maximum hide tide line. In Prince Rupert, from the Twitter feeds I saw, public officials were monitoring the waterfront and the tide lines and updating the public. RTA has all the advantages of the private port of Kitimat. It appears that monitoring the water level at the tide lines at the port of Kitimat was the responsibility of Plant Protection. Was RTA communicating what was happening with emergency services? Since RTA runs the private port, unlike in other jurisdictions, RTA had a responsibility to the people of Kitimat to report promptly to the public the conditions on the waterfront. Corporate public relations cannot just be sending out news releases with “good news.” That means that RTA public relations should have used its corporate Twitter account which usually sends out a news release every few weeks, to keep Kitimat updated on a minute-by-minute basis. If RTA communications staff in Kitimat do not have access to the RTA corporate Twitter account, they should establish their own local Twitter feed.

Both in 1964 and in 2012, the tsunami that came up Douglas Channel was minimal. But we know that this region does have a record of major quakes and that Douglas Channel has also experienced major landslides that can, in some circumstances, trigger a tsunami without an earthquake. The next few years will be seeing more industrial development along Douglas Channel which can also bring other hazards to the Kitimat region. While there are always communications breakdowns in situations like happened on Saturday, it is clear that the Kitimat emergency communications system needs a major upgrade to make sure the public is informed quickly and accurately of what is going on.

Rio Tinto Alcan reopens access to Kitimat waterfront

Rio Tinto Alcan has reopened Hospital Beach, the nearby boat ramp and Moore Creek and the Moore Creek falls for public use.

RTA took out an ad in a local newspaper Wednesday, Oct. 12, 2012, to make the announcement which came after a meeting members of the District of Kitimat Council on Oct. 4.

The RTA statement reads, in part:

Both Rio Tinto Alcan and the District of Kitimat understand the value and importance of ocean access to residents of the area while at the same time, continuing to respect and ensure that safety is the number one priority.

Over the last few months, while hearing the disappointment and concern about Hospital Beach, the KMP [Kitimat Modernization Project] Construction Team took action to mitigate the public safety risk. The massive rock trucks hauling heavy loads will be re-routed; a new bridge over Anderson Creek has been installed; new traffic lights will be installed near the Construction Village; and an extra construction road has been built from the former Eurocan Haul Road. All these measures have enabled the decision to accommodate the wishes of the community to access Hospital Beach, the boat ramp and Moore Creek safely.

It is important to remind residents however, Rio Tinto Alcan is in the middle of constructing a mega project to modernize and sustain the aluminium smelter business in Kitimat for the benefit of us all. This is the highest priority with many demands and intense focus. To that end, Rio Tinto Alcan will continue to assess traffic patterns and will likely need to make short term closures again as construction dictates. It is imperative that residents respect the company’s right to manage activities on its private property as it deems in the best interest of its business, including the KMP and public safety.

Rio Tinto Alcan and the District of Kitimat have committed together to work toward finding long term solution to ocean access. Thank you all for your patience, support and cooperation.

As the members of District council were meeting in Kitimat, in Prince Rupert, the Northern View reported that CN was cutting off access to part of the town’s waterfront, again for safety issues: CN erects barriers, no trespassing signs along Prince Rupert waterfront

Prince Rupert residents wanting to walk along the road adjoining the ocean past Rotary Waterfront Park will notice new barriers and signs alerting them that they would be trespassing should they do so.
The barricades and signs were put up yesterday, and CN regional manager of public affairs Emily Hamer says it is due to safety concerns with the public on the railway’s property.

Prince Rupert acting mayor Anna Ashley told the Northern View the city expected some restrictions during construction and said the city planned to talk to CN about the issue.

In an e-mail to Northwest Coast Energy News after the October 4 meetingm Kitimat mayor Joanne Monaghan, while hinting then that a solution to the restrictions was coming, said that industry has been faced with so many lawsuits that safety is becoming a bigger issue.

Councillor Corinne Scott also said that the meeting with RTA stressed that “Large businesses are putting safety as a higher priority.” (She also noted that council agreed to have regular meetings with RTA “.communication lines are open and we look forward to a continued good working relationship between the District of Kitimat and RTA. “)

In both cases, it appears that waterfront access is a legacy issue, left over from an earlier era of industrial development that gave little thought to either the environment or community.
Now it is also apparent that liability lawyers, who probably live thousands of kilometres away from the northwest, have, so far, been driving this issue, with little regard for the needs of local residents.

Make no mistake, safety should be a high priority, but arbitrary restrictions that may look good on legal brief, could actually mean that people would simply try to get around the restrictions, to the determent of safety. It is well known that RTA Plant Protection was finding people at Hospital Beach during the summer, especially at night, despite the publicized restrictions, barriers and warning signs.

Today with a strong need for jobs in northwestern British Columbia, future community needs for access to waterfront and green space (even in such a wide green area as northern BC) must be taken into consideration in municipal and corporate planning. If that planning isn’t done, that will mean that while there could be jobs, the northwest could be in a situation as it was this summer, with no way to enjoy the advantages of waterfront life in northern BC.

Water, not oil, is the hot issue this summer in Kitimat

Kitimat's "Hospital Beach" on March 17, 2012, with the construction at the Rio Tinto Alcan plant in the background, before the area was closed to the public. (Robin Rowland) (Robin Rowland) — Kitimat’s “Hospital Beach” on March 17, 2012, with the construction at the Rio Tinto Alcan plant in the background, before the area was closed to the public. (Robin Rowland)

The hottest issue in Kitimat this summer is water, not oil. For us, this summer can be summed up by saying: “Water, water everywhere, but you can’t get there from here.”

Even with David Black’s proposal for an oil refinery on a hill 25 kilometres north of Kitimat, residents here know that the Enbridge Northern Gateway debate has gone on for years and will go on for many years to come.

As environmentalists worldwide celebrate the beauty of Douglas Channel, and decry the dangers that tanker traffic could pose to the channel, many people in Kitimat are cut off from the waterfront.

At the District of Kitimat Council meeting on August 7, Coun. Mario Feldhoff introduced a motion calling for a study in an effort to find ways to launch kayaks into the ocean. Yes that’s right, according to members of council, you can’t even drop a kayak into the waters of Douglas Channel unless you pay the kind marina a launch fee usually charged for larger fishing boats. Kitimat is down to only one expensive boat launch.

In 2010, there were three marinas in Kitimat: one privately operated at a place called Moon Bay, a large marina owned by the Kitimat Stikine Regional District at MK Bay and a small marina at Minette Bay, also the site of a log export operation. There was also a boat launch on land known as “Alcan beach” or “Hospital Beach” on property owned by Rio Tinto Alcan (RTA) near the aluminum smelter. Hospital Beach is the only beach in Kitimat (named because it is on the site of the town’s original hospital in the 1950s). Moon Bay was located on land owned by RTA, and in April 2010, it ordered the marina shut down.

According to RTA spokesperson Colleen Nyce, that was largely due to concerns about how the marina was being operated.

Some people who moored their boats at Moon Bay moved to MK Bay (if there was room). Others hauled their boats out of the water and parked them in their driveways. In the ensuing two years, there have been increasing stories about mismanagement at MK Bay and complaints about moorageand launching fees that are much higher than elsewhere in the province.

This spring, citing construction at the smelter, RTA closed public access to Hospital Beach for picnics, kids’ play and just looking at the water. That meant the boat launch was also off-limits. RTA spokesperson Nyce said:

The Rio Tinto Alcan site is now a full fledged construction zone with constant vehicular and heavy duty construction traffic. To that end, and as Rio Tinto Alcan representatives have always said, during construction we will take necessary steps to eliminate potential hazards to the general public on our road including access to Hospital Beach. Therefore, Hospital Beach will be closed to the public until construction is complete or until we believe it is more safe for public access.

Before access was closed, if a Kitimat resident was driving to Hospital Beach, they pass what was once a rough logging road that snaked its way along the shores of Douglas Channel toward Bish Cove. Now Bish Cove is the site of the Kitimat LNG project terminal. As part of the construction process, KM LNG upgraded the road. However, as the pace of construction increases KM LNG is now limiting access to the road and its views of the channel.

Why is there no access to the waterfront, or for that matter to the magnificent Kitimat River estuary?

It goes back to 1950 when the province of B.C., in a loosely worded agreement with what was then Alcan and in an equally non-specific Industrial Development Act, handed over the land where Kitimat is now to the company.

That included almost all the waterfront and the estuary. On the estuary, there is one small area of land that is a reserve for the Haisla Nation and one small area not in RTA domain owned by the District of Kitimat — but there is no right of way through a potential private development. Over the years, and especially since Rio Tinto took over Alcan, there have been more and more restrictions placed on access to Kitimat’s waterfront.

Restricted access has become such an important issue that it came up during the National Energy Board hearings on the Kitimat LNG project and was part of the NEB ruling granting KM LNG its export licence. Access to Kitimat’s waterfront is also a factor in the Enbridge Northern Gateway project, although that part is lost in all the bigger issues.

The fact that you can’t get to the waterfront and the estuary are a problem not only for community recreation; the inability for a resident or visitor to launch a kayak or small boat into the channel, much less larger fishing or recreational vessels, has put the brake on expansion of Kitimat’s already lucrative fishing, guiding and boating services.

There is already a lot of skepticism in Kitimat — due to the boom and bust of the industrial cycle — about all those promises of jobs and prosperity from industrial development. Restricted access to the ocean means that despite the growing number of jobs in Kitimat, corporate policy makes it hard to enjoy the benefits of living on the Douglas Channel.

It is the kind of externality that is always ignored by economists and is totally irrelevant to those business writers who claim to be experts in Kitimat but who have never been within 1,000 kilometres of the town.

You look out your window at the mountains and ocean of Douglas Channel and ask why can’t the residents and tourists go to the beach? That could be a key issue in the Enbridge Northern Gateway debate.

Rio Tinto worried about LNG “shortage” in Australia

http://storify.com/nwcstenergynews/rio-tinto-worried-about-lng-shortage-in-australia

On the opposite site of the world, Kitimat, site of the Rio Tinto Alcan aluminum smelter, is poised to become a major export port for Canadian liquefied natural gas.

RTA issues lockout notice, CAW responds with strike notice as Alcan smelter contract deadline looms

Negotiations between Rio Tinto Alcan and Canadian Auto Workers Local 2301 are going down to the wire. The current contact expires Monday, July 23.

The CAW says 96 per cent of members voted in favour of strike action during voting Thursday and Friday. The Local represents 1150 workers at the Alcan smelter. One of the main issues in the negotiations is a reduction in the workforce to 699.

CAW Local 2301 president Rick Belmont said the union received a 72 hour lockout notice this afternoon and the union responded with a strike notice.

RTA spokeperson Colleen Nyce says issuing lockout and strike notice is standard practice during negotiations.

Both sides say negotiations will continue through the weekend.

If there are picket lines it could be a confusing and possibly volatile situation because the Kitimat Modernization Project is on the same site with a work camp full of construction workers on RTA property.

Most construction workers are employed or contracted by Bechtel, the construction contractor and are not members of CAW 2301.

Bechtel, RTA want to bring in Foreign Temporary Workers for Kitimat Modernization Project

Updated with Rio Tinto Alcan statement and CAW negotiations bulletin

Rio Tinto Alcan and Bechtel are proposing to bring in temporary foreign workers for the Kitimat Modernization Project, because, according to a letter from Bechtel obtained by Northwest Coast Energy News, a “labour shortage” is “a possible risk to the project schedule.”

The letter was sent by Dawn Perry, Field Contracts Manager, to Bechtel/RTA contractors on April 30.

The key paragraph in the letter says

Over the past several months, Bechtel and RTA have been working with government agencies to understand and establish a process to bring Temporary Foreign Workers to the project in the event there is a shortage of qualified craft workers in British Columbia and Canada. The process will benefit Contractors on the KMP that may experience labour shortages.

The Bechtel letter does say the company is consulting with trades unions involved

It is imperative that we all work together to identify labour needs in advance to provide the Building Trades Unions sufficient time to provide qualified labour.

Bringing in temporary foreign workers, whether by RTA, Bechtel or a contractor, must be approved by Citizenship and Immigration Canada.

In past news conferences, RTA managers have said there are problems in getting skilled workers or contractors for the $3.3 billion project, due to high demand locally from the proposed liquified natural gas projects and labour shortage as far away as the bitumen sands at Fort McMurray. On the other hand, there are continuing complaints from contractors who say that even trying to bid on a KMP project is a bureaucratic nightmare. There are also complaints that people from the Kitimat region that they are still are on waiting lists for jobs at KMP.

Colleen Nyce, a spokesperson for Rio Tinto Alcan in Kitimat said, “We actually hope to not have to hire temporary foreign workers. We prefer to hire from the local area and BC. This will, among other things, keep our costs down to hire from this jurisdiction.

“As of the present time, we have 54 per cent local workforce on the Kitimat Modernization Project. We are very proud of this. However, we are now entering the stage where, within the next four months we will be seriously ramping up the construction schedule and will need to hire qualified craft on a quick turn around basis.

“Since Notice to Proceed was given to KMP on December 1st, 2011, our Project burn rate is $3.1 million/day. We therefore cannot risk the project with workforce shortage issues and delays.

“As a precautionary measure, and given the length of time to receive government approvals, we made application for Temporary Foreign Workers, from the United States only, back in January. Our application for this has been supported by the unions affiliated with our project. We routinely have labour studies and labour surveys completed, as do the unions, and all intelligence is advising us that we will most likely be facing a skilled labour shortage.

Nyce says RTA is looking at: “All craft – electricians, carpenters, pipefitters; operators to name a few. We must search across Canada first. We are partnered with 16 different building trades unions. All of these unions have connections and members across the province, country and some into the United States.”

The date of the letter is already causing concern in Kitimat, coming as it does at almost the same time as Rio Tinto Alcan presented Canadian Auto Workers Local 2301 with a series of tough initial contract proposals that would see all but the most core jobs at the aluminum smelter contracted out.

Nyce, however, says, “This has absolutely nothing to do with BC Operations negotiations with CAW Local 2301.”

RTA locked out 780 United Steelworker members at the Alma, Quebec, smelter on December 31. The USW says talks with RTA broke down over the use of subcontractors and contracting out. RTA says its over all aluminum production dropped 12 per cent to 520,000 tonnes in the first quarter of 2012, mainly due to the lockout in Quebec, where smelter production dropped by about two-thirds.

There are already rumours in Kitimat that the temporary foreign workers would be used to keep the Kitimat Modernization Project on schedule in the case of a lockout or strike at the smelter itself.

UPDATE: CAW Local 2301 has issued its latest negotiation bulletin.In the bulletin, the local expresses its feelings of betrayal after negotiating a transition agreement with the company in 2007.The number of jobs at the new smelter will drop from a miniumum of 850 (although 1,000 jobs was the figure used most often) to 699.

The company’s position on the modernized smelter was an insult to the Union, tore away any sense of credibility that may have existed and has set the stage for a collision at this set of negotiations.

Rio Tinto Alcan has presented the union with a long list of jobs that would be contracted out but where those contractors would be working alongside union members in the new smelter and nearby locations.

CAW 2301 is now considering its response to RTA. There are membership meeting this week.

The letter also comes at time when the national level of the Canadian Auto Workers is expressing doubts about the Conservative government’s push to increase the number of Temporary Foreign Workers.

In an phone interview, Ken Lewenza, president of the CAW, said Tuesday, “I am not totally convinced that there is a shortage of worker problem with a little under 10 per cent unemployment. The real problem is where is the work and how do we fit the skills of our Canadian work force to meet those particular requirements and if for any reason we can’t do that based on knowledge, based on recognizing the kind of skills that are needed and how you prepare workers who are working in precarious situations who are unemployed, how we can better prepare for these kind of work opportunities, I think what government is doing, employers contractors, are seeing foreign workers as the first priority when it should be that absolute last.”

As for the rumours that temporary foreign workers could be used to keep the KMP going or even become possible replacement workers, Lewenza said, “If foreign workers were to replace our members at 2301 at a time we’re in labour negotiations, as replacement workers, then that would lead to a huge confrontation, at a time when quite frankly it’s not necessary. The whole idea of bringing in foreign workers is if there is a shortage of labour, a labour disruption isn’t a shortage of labor, it’s a shortage of getting a collective bargaining agreement.”

The RTA contract proposals were also on the table at Monday’s District of Kitimat Council meeting, where Councillor Phil Germuth led off the discussion by saying that he was disappointed by the RTA proposals, saying that over the past several years council has granted RTA every variance and development proposal it wanted and has agreed to forgo $7 million in tax revenue for the Kitimat Modernization Project, and, “We were promised there was going to be about 1000 jobs, now they are down to 700. I find it hard to believe that they would propose 300 job losses and not expect any problems at all, This council and previous councils have been working with them and now to have another 300 jobs cut that’s a big disappointment.”

Sources have told Northwest Coast Energy News that some members of middle and upper management at the Kitimat smelter are also not happy with the contract proposals, which together with the Alma lockout, are bringing back a corporate culture clash between the former Alcan management and the different attitudes brought to Canada by Rio Tinto, a London based multinational.

Olympic medals

A group calling itself Off the Podium, led by former Olympian Bruce Kidd, is asking the London 2012 Olympic committee (LOCOG) to drop RTA as the official supplier of gold, silver and bronze for athletes’ medals.

Signed by Steelworkers National Director Ken Neumann, the complaint asserts that Rio Tinto’s actions in Alma violate the Games’ ethical procurement standards because they consist of an illegally-declared lockout, serious and significant violations of the workers’ health and safety, shirking its obligations by sub-contracting out work to low paid workers, and paying wages and benefits below industry benchmark standards.
Neumann’s complaint letter goes on to request that LOCOG follow its ethical guidelines to reject Rio Tinto as a supplier.

: Bechtel’s April 30 letter to contractors about bringing in Foreign Temporary Workers

Alberta Oil magazine describes Kitimat LNG projects as high stakes poker

It looks like the Chinese curse (and journalist’s blessing) “May you live in interesting times,” has come to Kitimat, especially when it comes to selling LNG to Asia.

In the past months the world liquified natural gas market has become more volatile with increased competition across the globe and, in some cases, political factors adding to the molecule mix.

In the past few days, Alberta Oil magazine has published a series of articles on the Kitimat LNG projects, describing the projects as a high stakes poker game.

The point is that the potential Asian buyers for BC (and US) liquified natural gas want a secure supply and they’re not sure what is going on on this side of the Pacific.

That’s apparently why the first project, KM LNG, has put off the final go ahead project from the first quarter of 2012, as originally expected, to the now likely the fourth quarter of 2012.

That has left a lot of uncertainty in town, despite assurances from two of the KM LNG partners, Apache Corporation and EOG Resources that they are optimistic that there will be a deal with Asian gas buyers, even if it means Asian equity in the KM LNG project.

That uncertainty in Kitimat has led to widespread rumours, none substantiated, that the three proposed projects, by KM LNG, by the Houston-Haisla BC LNG partnership and Shell, may be consolidated in one way or another.

At Kitimat council on Monday, April 2, Mayor Joanne Monaghan said “There has been a rumour around recently that Apache is stopping their working for a year and I talked to the CEO, Tim Wall, yesterday and he assured me that that was not true.”

Work is continuing on the KM LNG site at Bish Cove.

This morning, April 5, 2012, Alberta Oil reported that EOG Resources boss still bullish on Kitimat LNG, quoting a company called Bernstein Research that met with EOG’s top executive, CEO Mark Papa, who told Bernstein that EOG considers its 30 per cent holding in KM LNG as a “core holding.”

In a Thursday research note, Bernstein’s Bob Brackett says EOG is willing to sell some of its stake in the Kitimat project to a buyer (likely of the Asian persuasion) looking for equity in the upstream portion of project. “EOG expects to dilute a portion of its stake for that purpose,” Brackett writes.

A day earlier, Alberta Oil reported in Global LNG players jockey for space on a crowded field noting that Australia’s LNG megaprojects are facing competition from North America and cost inflation as the number of projects increase. At the same, US LNG projects are trapped in the current mire of US politics, with many politicians wary of the energy-starved US exporting natural gas.

In Apache Canada makes global push amid fierce competition, the article that uses the poker analogy, the magazine quotes Asish Mohanty, senior research analyst, global LNG, with Wood Mackenzie

Kitimat is due to start pumping out five million tonnes of LNG by 2015, widely viewed as a market “sweet spot” because it beats a number of major Australian projects – among them Shell’s massive Prelude endeavor – into production. “It’s a bit of a race,” Mohanty at Wood Mackenzie says. “The general impression in the industry is that before these Australasian projects start up it’s going to be a sellers’ market.”

Mohanty also looks at the problem of cost inflation and limited resources, a problem Kitimat already faces with not only the three proposed LNG projects but RTA’s Kitimat Modernization Project.

Companies that specialize in engineering, procurement and construction of liquefaction facilities number fewer than 10 internationally, Mohanty says. He expects many of them will be kept busy by construction of several LNG projects underway in northwest Australia, including ongoing work at the massive Gorgon plant at Barrow Island. The Chevron-led venture is due to begin pumping out 15 million tonnes of LNG annually by 2014-15. “All of these are massive projects,” the analyst says. “What that means is order books are pretty full. There is a scarcity of resources in places like Australia right now.”

The shortfall could potentially squeeze Canadian LNG forays. “The fact that most of the B.C. facilities are going to be ‘green-field’ will not make it easy for them to meet a timeline compared to a lot of others.”

Related CBC News Mackenzie Valley pipeline funding reduced

Kitimat Modernization will create competitive contractors for future energy projects: RTA CEO

Jacynthe Côté, CEO Rio Tinto Alcan — Jacynthe Côté,the CEO of Rio Tinto Alcan, briefs reporters on the progress of the Kitimat Modernization Project,March 8, 2011(Robin Rowland/Northwest Coast Energy News)

The Kitimat Modernization Project, the $3.3 billion upgrade of the Kitimat aluminum smelter will create capable and competitive contractors that can go on to work at the future energy developments in the region, Rio Tinto Alcan CEO Jacynthe Côté said Thursday, March 8.

Côté was in Kitimat to tour the region, a trip that was postponed in December, at the time of the “Notice to Proceed” on the modernization project, when her aircraft was diverted to Prince Rupert by a snow and sleet storm the day of the announcement.

During a dinner on Wednesday night, Côté met with leading contractors, the leaders of the Haisla First Nation, Mayor Joanne Monaghan and members of the District of Kitimat Council.

The prospect of future energy projects, three liquified natural gas terminals to be built by the KM LNG partners, by the BC LNG partnership and by Shell was one factor in Rio Tinto Alcan giving the go ahead for the modernization project, she told local reporters.

“We have seen the critical mass in other parts of the world, “she said. “One of the reason to do full speed in December was to aim that we will be ramping down as the others are ramping up. Of course, I cannot say for the other projects that will be their decision.” Given the current schedules, she said, “we should be out of the way when others pick up.” (Another key reason for the go ahead, according to RTA primary metal vice president Jean Simon, speaking at the launch last December was the growing market for aluminum in Asia)

Côté added that the contractors now have “great abilities that could be redeployed.”

Michel Lamarre, Director of KMP said that despite some delays due to the harsh winter, RTA is still aiming for first concrete at the new potlines on June 1. First new metal is scheduled for the second quarter of 2014. Peak employment, about 2,500 people, is expected to be in the first quarter of 2013.

“We have the ambition to make the project a real showcase, for us, for British Columbia, for Canada,” Côté said. “So we’re pretty proud that 62 per cent of the work done so far has been done by the community in the area., 95 per cent of them in British Columbia, which is absolutely spectacular for a project of that complexity and magnitude.

“It requires a lot of skills, a lot of organization.”

Côté said she stressed RTA’s safety priorities when she met with the local contractors (a point the company made both at the Notice to Proceed gathering in December and at a local meeting for contractors last month). The contractors are very enthusiastic, Côté said. “I’ve seen in other regions as contractor and employees moved to that level of safety performance, it becomes a competitive edge, there’s going to be other projects coming in the region, there’s a lot of discussion around LNG, and it will be an advantage for contractors who have demonstrated superior performance and safety. We’re here to support that. I think they’re going to be more compelling and competitive, I mean it’s good business.”

She says that RTA is spending $3.1 million each day on the modernization project.

Asked about both the prospective LNG projects and the fact that accommodation in Kitimat is now at a premium, she said that “crowding” was a significant part of her discussions with both the Haisla and the District of Kitimat.

Rio Tinto has worked on what she called “disproportionately big” projects at sites compared to local communities around the world. “So we adjust, my message was we adjust.[There are] Different formulas in different parts of the world, depending on the conditions. The model is to bring in as many people from the community as we can.”

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Apache, Shell mark LNG progress at District of Kitimat council

Eurocan site at Kitimat — Apache will build the work camp for the Kitimat LNG project at the old Eurocan site. (Robin Rowland/Northwest Coast Energy News)

As the financial and energy markets speculated Monday, Feb. 6, 2012 that Apache Corporation would make an official announcement during its quarterly webcast next week that the Kitimat LNG project will go ahead, a company report to the District of Kitimat Council, released this evening, is a strong indication that the project is a go.

Mayor Joanne Monaghan told the council that Apache has reported to the district that work at the site for the LNG terminal at Bish Cove has been “progressing well” through the winter and was now “progressing toward the construction phase.” Work so far at Bish Cove includes site preparation, building an access road and a temporary dock for the crew boat.

Monaghan said that Apache will begin work on a work camp for the Kitimat LNG project at the old Eurocan site “shortly.”

Monaghan also that the province of British Columbia told her that it estimates that there will be 800 permanent, long term jobs in British Columbia over the life of the projects 9,000 construction jobs over the 10 to 15 year multi-train (phase) plans from the KM LNG, BC LNG and Shell projects. Premier Christy Clark estimated that LNG projects will bring the province $1 billion in revenue. (For Premier Christy Clark’s statement see Vancouver Province Liberals shift strategy to LNG)

The mayor said that Apache plans to work closely with local contractors in general contracting, supplies, concrete supply, logging and land clearing and other supporting jobs.

Apache will be in competition with Rio Tinto Alcan for the local workforce and contractors. Last Thursday, RTA, which is working on a $3 billion modernization project at the Kitimat aluminum smelter, stole a march on Apache, by holding a day long conference for contractors and suppliers across British Columbia, including a tour of the plant, so they could bid on work during that project.

At the same meeting, district council was told that Shell has begun the official transition in its takeover the old Methanex site, which it recently purchased from Cenovus by applying for a licence of occupation at the site, which included asking for permission under district of bylaws to put a Shell Canada sign at the entrance to the site, replacing the current Methanex sign. The old Methanex site will be the base for Shell’s plans for its LNG project.

(This story has been updated and corrected after checking Christy Clark’s statement on LNG which at the council meeting was attributed, in part, to Apache)