Chevron | Northwest Coast Energy News

Chevron advertises for Houston-based Kitimat plant logistics manager

Chevron, which recently took over management of the Kitimat LNG project is advertising for a Houston, Texas, based logistics manager for the project.

The ad gives (in part) this job description:

Chevron is accepting online applications for the position of Kitimat Plant Logistics Manager located in Houston, TX through February 19, 2013 at 11:59 p.m. (Eastern Standard Time).

The Kitimat LNG project is located in Western Canada and includes 1) construction of the 2 x 5.5 MTPA Kitimat LNG Plant and 2) the Pacific Trails Pipeline.

Responsibilities for this position may include but are not limited to:

Responsibility for overseeing and managing the entire plant logistics program including module, equipment and bulk cargo logistics throughout the overall supply chain. Development of the necessary organizational capability within the Kitimat team, Engineering, Procurement & Construction (EPC) Re / Engineering, Procurement and Construction (Management) (EPCM) Contractor organization, and selected logistics contractors’ organizations

Assist in the development of contract ITB templates and scopes of work for project logistics contracts for (a) Heavy module marine/road transport and (b) General cargo transport from worldwide locations to module yards and Kitimat, freight forwarding services, and in-country transport, including development of criteria to evaluate bids.

Oversee the selected logistics contractors’ performance of project logistics, focusing primarily on the movement of prefabricated modules from multiple locations to ports near Kitimat.

Haisla, Ottawa and BC sign agreement to open way for Kitimat LNG developments

The Haisla Nation, the federal government and the province of British Columbia have signed an agreement that opens the way for liquified natural gas development on Haisla territory on Douglas Channel.

The federal government also announced new regulations under the the First Nations Commercial and Industrial Development Act (FNCIDA). The regulations are necessary because First Nations are still governed by provisions of the century old Indian Act and reserve land is outside of provincial jurisdiction.

The agreement was announced at a news conference in Vancouver today, January 22, 2013. At this point it mainly concerns the Kitimat LNG project (also known as KM LNG)

A news release from the federal department of Aboriginal Affairs and Northern Development says: “FNCIDA was a First Nations-led initiative that allows the government to work with First Nations and provincial regulatory authorities to create regulations for complex commercial and industrial development projects on reserve.”

The tripartite agreement with the Government of Canada, Government of British Columbia and Haisla Nation “ensures administrative, monitoring and compliance activities for the LNG facility are performed and enforced by provincial officials.”

The news release also quotes Haisla Chief Counsellor Ellis Ross as saying: “Kitimat LNG offers new, important and sustainable economic opportunities which the Haisla people are eager to embrace. We have seen new jobs, business opportunities, and skills training come to our people since KM LNG signed its agreement with us, and we know that the agreement signed today with Canada and BC is a milestone in making the project a reality. On behalf of the 1,700 Haisla people, I thank both governments for their commitment to this important agreement and the better future it is bringing our people.”

The federal news release goes on to quote BC Community, Sport and Cultural Development Minister Bill Bennett as saying: “The BC Government is working with industry and First Nations to foster economic growth through the expansion of our province’s natural gas sector. I would like to thank the Government of Canada and the Haisla Nation for working with us to move the Kitimat LNG facility another step forward.”

The federal release also quotes executives from both major companies involved in the Kitimat LNG project, Apache and Chevron. Chevron recently took over operating control of the project from Apache when that company had difficulty finding customers in Asia for the LNG.

The Government of Canada, Government of BC and the Haisla Nation have shown exceptional leadership and support towards BC’s new LNG industry” said Tim Wall, President of Apache Canada. “This regulatory agreement builds on the many other agreements with the Haisla that has led to jobs, training, education and economic development in Kitimaat Village.”

“I want to congratulate the Haisla First Nation, the Governments of Canada and British Columbia, and Apache Canada for their shared leadership in finalizing the regulations governing the Kitimat LNG facility site,” said Jeff Lehrmann, president, Chevron Canada Limited. “We look forward to working with the Haisla First Nation, both governments, other First Nations and local communities to realize the project’s long-term economic potential.”

In remarks prepared for the meeting Canada’s Aboriginal Affairs minister John Duncan was quoted as saying

The proposed project will provide Canada’s energy producers with a doorway to overseas markets, in addition to creating jobs and economic development opportunities not just for the Haisla First Nation, but the entire northwest region of British Columbia.
That’s good news for members of the Haisla Nation, good news for British Columbia, and good news for all Canadians.
These regulations are passed under the First Nations Commercial and Industrial Development Act, known as FNCIDA, which allows the federal government to develop regulations for complex commercial and industrial development projects on reserve in partnership with First Nations and Provincial governments.
For First Nations, FNCIDA can remove the barriers they face in pursuit of economic development opportunities, while providing the certainty investors require, and assuring the community that the necessary oversight measures are in place.
Together with the Province of British Columbia and the Haisla Nation, the Government of Canada has also signed an agreement which ensures administrative, monitoring and compliance activities for the facility are performed and enforced by provincial officials who have the necessary experience and expertise.
As a result, the regulatory pieces are now in place for project to proceed.

Duncan added:

To protect the environment as it relates to natural gas production, together with the Province of British Columbia we have completed an environmental assessment pursuant to the Canadian Environmental Assessment Act. With our partners, we will ensure that the LNG plant is designed and built to industrial safety standards and that the operation is properly regulated

Chevron takes over Kitimat LNG operations from Apache, EOG and Encana

Apache has a new partner in the Kitimat LNG project, Chevron Canada Ltd and, in effect, Chevron is taking over the project from Apache who has been unable to find customers for the liquified natural gas project in Asia.

A news release from Apache announced “a broad agreement with Chevron Canada Limited to build and operate the Kitimat LNG project.”

Chevron Canada and Apache Canada each will become a 50 per cent owner of the Kitimat LNG plant, the Pacific Trail Pipeline and 644,000 gross undeveloped acres in the Horn River and Liard basins. Chevron Canada will operate the LNG plant, which will be located on the northern British Columbia coast, and the pipeline. Apache will continue to develop shale gas resources at the Liard and Horn River basins in north eastern BC.

Encana and EOG Resources — currently 30 percent non-operating partners in Kitimat LNG and Pacific Trail Pipeline — will sell their interests to Chevron and exit the venture. As part of the transaction with Chevron, Apache will increase its ownership of the plant and pipeline to 50 percent from 40 percent.

G. Steven Farris, Apache’s chairman and chief executive officer said in the company news release, “This agreement is a milestone for two principal reasons: Chevron is the premier LNG developer in the world today with longstanding relationships in key Asian markets, and the new structure will enable Apache to unlock the tremendous potential at Liard, one of the most prolific shale gas basins in North America.” “With experience developing LNG projects, marketing expertise and financial wherewithal, Chevron is the preferred coventurer to join Kitimat LNG,” Farris said. “Apache has a proven record in finding and developing shale gas resources in Canada and is the logical operator for the upstream elements of the joint venture.”

In its news release, Chevron quoted vice chairman George Kirkland as saying: “The Kitimat LNG development is an attractive opportunity that is aligned with existing strategies and will drive additional long-term production growth and shareholder returns.”

“This investment grows our global LNG portfolio and builds upon our LNG construction, operations and marketing capabilities. It is ideally situated to meet rapidly growing demand for reliable, secure, and cleaner-burning fuels in Asia, which are projected to approximately double from current levels by 2025.”

The two-train (stage) Kitimat LNG Project is still working through the Front-End Engineering and Design (FEED) phase. Construction has continued at the Bish Cove site throughout the summer but has slowed down to the uncertainty over the future of the project and some environmental problems.

Current plans call for two liquefaction trains, each with expected capacity of 5 million tons of LNG per annum (about 750 million cubic feet of gas per day). Kitimat has received all significant environmental approvals and a 20-year export license from the Canadian federal government.

The 290-mile (463-km) Pacific Trail Pipeline is planned to provide a direct connection between the Spectra Energy Transmission pipeline system and the Kitimat LNG terminal.

While the Apache release says: “The project has strong support from many of the First Nations along the route,” there is no support at this moment from the Wet’suwet’en, in the area from Burns Lake through Smithers to the mountains, because some houses are strongly opposed to the pipeline on their traditional territory.

In the Apache news release, Farris says: “”We want to thank and acknowledge EOG and Encana for their contribution to the development of the Kitimat project. We appreciate the hard work of many employees and contractors to advance the project to this stage and the strong support the plant and pipeline projects have received from local communities, provincial and federal officials and the Haisla and other First Nations.

“Construction of the plant and pipeline will have a significant economic impact, and the operational phase will provide opportunities for employment as well as royalties and tax revenues for the Federal, Provincial and local governments for many years,” he said. “Chevron and Apache will continue to develop this project in a safe and environmentally responsible manner.”

As the news releases point out Chevron is a major player in Australia’s LNG projects, considered by many to be Canada’s rival in finding market for natural gas in Asia. Chevron is the operator and led marketing efforts at Wheatstone, a two-train plant with capacity of 8.9 million tons of LNG a year that is expected to commence operations in 2016. Chevron also operates the Gorgon LNG project in Australia and LNG Angola.

Much of the media attention is also on the deal for the natural resources northeastern BC, with, Chevron Canada acquiring approximately 110,000 net acres in the established Horn River Basin from Encana, EOG and Apache, and approximately 212,000 net acres in the Liard Basin from Apache. Chevron Canada Limited and Apache will each hold a 50 percent interest and Apache will operate these two natural gas resource developments.

In its news release, Encana concentrates on the natural gas deal, quoting Randy Eresman, Encana’s President & CEO, “This investment by Chevron, a multinational LNG player, represents a key step in the development of LNG export from Western Canada. Our main goal since we first acquired an interest in Kitimat LNG almost two years ago was to help ensure the progression of this project towards its development. While we are no longer a direct participant in this project, we continue to support LNG export as vital to diversifying markets for North American natural gas.”

The company goes on to say that: “The sale of Encana’s interest in the proposed Kitimat LNG export facility is consistent with the company choosing to focus on its core business. In addition, this transaction reduces Encana’s future capital commitments. The proceeds from this transaction will help to strengthen the balance sheet and provide further financial flexibility to fund capital programs and develop key and emerging resource plays.”

The Financial Post points out that “the Chevron deal leaves most of the LNG projects in the hands of foreign companies, which have competing interests in LNG projects across the world.” That means that the Haisla Nation, with its partnership with the BC LNG project, is one of the few Canadian players left in the LNG scramble.