Category: BCLNG

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.”

 

 

 

 

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)

PetroChina looks to Kitimat as it spends $1 billion for Shell shale gas in northeastern BC

PetroChina has bought a 20 per cent stake in Shell Canada’s Groundbirch shale-gas project in north eastern BC, leading to media reports that PetroChina is also investing in Shell’s planned Kitimat liquified natural gas export terminal in Kitimat.

The Groundbirch  “play”  in the northeastern BC shale gas fields produces 180 million cubic feet of gas a day form 250 wells.

A Hong Kong website, FinanceAsia, reported that PetroChina is paying $1 billion for the stake in the northeast BC shale gas operation.

China Daily confirmed the story, quoting Mao Zefeng, the Beijing-based spokesman of PetroChina, who declined to give the value of the transaction.

China Daily said Shell and PetroChina’s parent agreed in June to increase cooperation in energy exploration in China, estimated to hold the world’s largest reserves of shale gas. The semi-official newspaper says Petro China is looking to Canada to obtain drilling technology and expertise.

“It’s a continuation of our cooperation in China, and we can learn about shale-gas exploration and production by being a partner in the Canadian shale-gas project,” Mao said. “The project will also bring us good investment returns.”

Barron’s also reported that China is looking to get more experience shale gas, quoting Benchmark analyst Mark Gilman who told Dow Jones Newswires. “They are trying to learn about this business, on the basis of their belief that it will better position them to assess and develop similar resources within China,” he said. In fact, Shell and PetroChina are exploring for shale together in China, so the Canadian deal may be a “quid pro quo” gesture to Shell, he added.

Shell executives said at a meeting in London on Thursday that the company has invested $400 million in shale gas exploration in China, funding 15 wells with more in the future.

Last fall, Shell purchased the old Methanex site and the Methanex marine terminal in Kitimat.

Both The Globe and Mail and Postmedia News are tying the investment directly to Shell’s Kitimat LNG export project.

The Globe and Mail says that PetroChina as well as Japan’s Mitsubishi and Korean Gas are stakeholders in the Shell Kitimat LNG project.

PetroChina’s had agreed with Encana, a partner in the KM LNG project to invest $5.4-billion in the company’s shale gas operations in British Columbia. That deal collapsed last fall after the two companies could not agree on finances.

PetroChina is also a heavy investor in the Alberta bitumen sands.

The deal between PetroChina and Shell came on the same day that National Energy Board approved the BC LNG project, the second one to be proposed for Kitimat. The first, approved in October, is the Kitimat LNG project owned by the KM LNG partnership.

It also comes a few days before Prime Minister Stephen Harper begins an official visit to China.

NEB approves BC LNG, second Kitimat LNG project

The National Energy Board has approved a 20-year-export licence for Kitimat’s second LNG project, known as BC LNG. A NEB news release says:

The export licence authorizes BC LNG to export 36 million tonnes of LNG, which is equivalent to approximately 47.9 billion m³ of natural gas, over a 20 year period.

The maximum annual quantity allowed for export will be 1.8 million tonnes of LNG, which amounts to approximately 2.4 billion m³of natural gas.

A co-operative comprised of natural gas producers, marketers and LNG buyers is a central feature of BC LNG’s export proposal, where members of the co-operative will submit bids to provide natural gas to be liquefied or purchase LNG.

A committee will review the bids and choose those that will yield the greatest margin to the co-operative. Membership in the co-operative is currently comprised of thirteen parties, and additional members may join upon request.

BC LNG’s export model permits smaller natural gas market participants in Canada to play a part in exporting LNG. In approving BC LNG’s application, the Board satisfied itself that the quantity of gas to be exported is in excess of the requirements to meet the foreseeable Canadian demand.

The Board also determined that the volumes of natural gas proposed to be exported are not likely to cause Canadians difficulty in meeting their energy requirements at fair market prices.

The Board acknowledged the potential economic benefits associated with BC LNG’s project. In particular, the Board noted the benefits for the Haisla Nation, including an interest in BC LNG, and employment opportunities resulting from the development and operation of the liquefaction facility.

BC LNG Map
Map showing the BC LNG site in Kitimat harbour (NEB)

The Haisla Nation has a 50 per cent stake in the project through the Hasila Nation Douglas Channel Limited Partnership.
The NEB says the Haisla say the new revenue source would allow the First Nation to support health, education, community development and the many other needs of the First Nation and its members. The Haisla say that business and
employment opportunities associated with the development of the LNG terminal and associated
facilities would be available for Haisla members and businesses.

The NEB also says that the Haisla indicated
that a number of other Aboriginal persons, businesses and nations would see economic spinoff  benefits from the development.

The NEB decision says there will be two “liquefaction trains” on barges in Kitimat harbour. The
first train is scheduled to commence in 2013-14 and the second train in 2016-18. Each train will
have a daily volume requirement of 3.5 million cubic metres a day (125 MMcf/d) of natural gas. After completion of both trains, the terminal will have an annual liquefaction capacity of 1.8 million tonnes of LNG.

LNG from the Terminal will be pumped directly into an LNG tanker berthed adjacent to the barge. It will take about 30 days to fill a typical LNG tanker and approximately 25 days to make the roundtrip between Kitimat and markets in Asia.

Talisman Energy Inc. and Tenaska Marketing Canada both have a stake in the project.

The NEB approved the first project, known as Kitimat LNG, operated by the KM LNG partnership on October 13, 2011.

That export licence authorized KM LNG to export 200 million tonnes of LNG (equivalent to

BC LNG pipeline map
Map of pipelines that will feed the BC LNG project (NEB)

approximately 265 million 10³m³ or 9,360 Bcf of natural gas) over a 20 year period. The maximum annual quantity allowed for export will be 10 million tonnes of LNG (equivalent to approximately 13 million 10³m³ or 468 Bcf of natural gas). The supply of gas will  come from producers located in the Western Canada Sedimentary Basin. Once the natural gas has reached Kitimat by way of the Pacific Trail Pipeline, the gas would then be liquefied at a terminal to be built in Bish Cove, near the Port of Kitimat.

A third LNG project by Shell Canada, which will use the old Methanex site in Kitimat and the old Methanex marine terminal in Kitimat harbour is currently in the preliminary planning stages.

The NEB hearings on the LNG projects are different from the current Joint Review Panel hearings on the Enbridge Northern Gateway Pipeline.   The JRP hearings are a “facility hearing” and cover the entire project, including environmental impacts.  Since neither LNG project actually crosses a  provincial boundary, the NEB’s jurisdiction is limited to granting the export licence.

Editorial: Just asking: why didn’t anyone object to the Americans at the NEB LNG hearings in Kitimat?

The Joint Review Panel hearings on the Northern Gateway pipeline are less than 48 hours from now. The media are packing their bags and coming to Kitimat (or perhaps Terrace since this town is booked solid).

The propaganda war, and it can only be called a propaganda war, is in full force, driven mostly by right wing columnist Ezra Levant and his Ethical Oil organization, objecting to “foreign intervenors in the pipeline hearings at another site OurDecision.ca

This now seems to have widespread support, in a Twitter debate last night, many even moderate conservatives and even moderate Albertans were saying there is too much foreign influence in the JRP hearings.

I have one question for these people. Where were you in June? On a beach?

It was in June that the National Energy Board held hearings on the first of the three proposed Liquified Natural Gas projects in Kitimat. No media hordes descended on Kitimat. At those hearings only local reporters showed up and I was the only one that stuck through the entire proceedings. (The NEB did approve the export application)

So when the media quote Levant and his spokesperson Kathryn Marshall, the widespread stories about this malevolent foreign influence are inaccurate because they weren’t in Kitimat in June so they didn’t hear all those deep Texas drawls in the hearing room at the Riverlodge Recreation Centre.

Although a lot of good reporters are coming into town this week, they’ll all be gone by Thursday morning when the JRP hearings move on to Terrace.

So in today’s Sun Media papers Levant says:

Who should decide whether Canada should build an oil pipeline to our west coast — Canadian citizens or foreign interests?
That’s what the fight over the Northern Gateway pipeline is about. Sure, it’s also about $20 billion a year for the Canadian economy and thousands of jobs. It’s about opening up export markets in Asia. It’s about enough new tax dollars to pay for countless hospitals and schools.
But it’s really about Canadian sovereignty. Do we get to make our own national decisions, or will we let foreign interests interfere?
The answer should be obvious to any self-respecting Canadian: This is a Canadian matter, and Canadians should decide it.

Why weren’t Levant and the rest of the blue-eyed sheikh crowd (OK they don’t all have blue yes but you know what I mean) across the Rockies here in June objecting to those Americans interfering in Canadian affairs with their plans to export liquefied natural gas to Asia?

Who is behind the Kitimat LNG project? Well, the KMLNG partners are Houston, Texas based Apache Corporation, Houston, Texas based EOG Resources and Encana, a company that originated in Canada but now has extensive operations in the United States and around the world.

The second LNG project, which is now before the National Energy Board, is BC LNG, a partnership between a Houston, Texas-based energy company and the Haisla First Nation here in Kitimat.

The third LNG project is coming from energy giant Royal Dutch Shell.

When are we going to see Ethical Oil and all those conservative columnists objecting to American participation when the NEB holds hearings on the second and third LNG projects?

This goes all the way to the centre of power. Stephen Harper objects to the Northern Gateway hearings being “hijacked by foreign money.” I notice the Prime Minister didn’t object to the hearings in June with American companies Apache and EOG investing in a natural gas pipeline. Cabinet ministers Joe Oliver and Peter Kent are also concerned about foreign influence on pipeline projects. That is they are only worried about possible foreign influence when it comes to the environment. Foreign influences that are building natural gas pipelines and LNG terminal facilities are perfectly fine, thank you.

Blaming “foreign influence”, of course, is one of the oldest dirty tricks in the political playbook. In recent days Russian Prime Minister Vladimir Putin has blamed foreign influence for the demonstrations against the rigged election in that country. In Syria, Bashir al-Assad is still blaming “foreign agitators” for the revolt against his regime. Before they were ousted, both Hosni Mubarak of Egypt and Mohamar Gaddafi of Libya blamed “foreign agitators” for the Arab Spring. Go to Google News and type in “foreign influence” or “foreign agitators” and now that Google News also searches news archives, you can find stories of politicians all over the world blaming foreigners for their troubles going back to the turn of the last century.

It’s just sad to see Canada’s leading politicians and the major media joining that sorry tradition.

Note Natural Gas is not bitumen

Some in the media seems to be puzzled that most of the people in northern British Columbia are not objecting to the liquified natural gas projects. The media seem puzzled that KM LNG has been able to reach agreements with First Nations along the natural gas pipeline routes when Enbridge can’t.

(One factor is that Enbridge got off on the wrong foot with First Nations and things have generally gone downhill from there, leading people in northwest BC to question the general competence of Enbridge management.)

The answer is that natural gas is not bitumen. Natural gas is known factor. Bitumen, despite the thousands of pages of documents field by Enbridge with the JRP, is an unknown factor since there has never been a major bitumen disaster.

The worst case scenario, a catastrophic LNG ship explosion, could cause a huge forest fire. A natural gas pipeline breach under the right conditions could start a big forest fire. The environment of northwestern British Columbia has evolved to deal with fires. After such an incident, nature would take over and the forest would eventually come back. It is likely that the forest would take longer to recover than it would from a lightning strike fire, but the forest would recover. Bitumen leaking into salmon spawning rivers would kill the rivers. Bitumen stuck at the deep and rocky bottom of Douglas Channel would contaminate the region, probably for centuries.

It’s that simple.

 

Related Terrace Daily  No Apology Forthcoming by Gerald Amos

Business and labour leaders show their support for northern pipeline initiatives: Vancouver Sun

Energy Economy

Gordon Hamilton in the Vancouver Sun writes Business and labour leaders show their support for northern pipeline initiatives

Sixteen business and labour leaders have signed an open letter to British Columbians urging their support for natural gas and oil pipeline proposals across the northern half of the province which they say are needed to link Canada’s energy resources and B.C.’s economic future more closely to Asian economies.

The letter marks the first public relations campaign aimed at swaying opinion province-wide towards energy projects in the North. Up until now, only regional support groups have been formed, such as the Enbridge Northern Gateway Alliance, which is actively supporting Enbridge’s $5.5 billion Alberta-to-Kitimat pipeline project in communities along the pipeline route.

The letter was written by former federal transportation minister Chuck Strahl. Signatories include former international trade minister David Emerson, the B.C. and Yukon Territory Building and Construction Trades Council, the Business Council of B.C., the Vancouver Board of Trade and the Canadian Manufacturers and Exporters the country’s largest industrial association.