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Apache posts job for Kitimat LNG construction manager

The Apache Corporation website has a posting for a construction manager for the Kitimat LNG project.

The posting says the job will initially based in Houston, Texas, with the manager coming to Kitimat sometime in the future.

The posting calls for the manager to provide an overall construction plan, co-ordinate and control the construction project from inception to completion aimed at meeting the Project’s requirements in order to produce a functionally and financially viable safe project that will be completed on time within the authorized budget and to the required quality standards.

Some of the job requirements give hints of the project to come:

Previous LNG Project experience including construction
Experience of modular and stick built construction
Working knowledge of safety system and management to maintain world class safety performance
Working knowledge environment system and management to maintain world class environmental performance
Knowledge of logistics in remote sites
Knowledge of heavy haul and lift works
Proven ability with advanced project management principles
Proven ability with people management
Experience in Canadian labor law and have deep experience working with unionized labor
Experience in working through cold weather climates

The site also has a posting for a Contracts and Procurement Manager.

Both postings expire on May 2, 2012.

Although Apache and its partners, Encana and EOG Resources now say that they have postponed the final go-ahead decision on the KM LNG project until the fourth quarter of 2012, as negotiations continue with Asian natural gas customers, the postings are indication that the project is progressing.

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.”

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)

CIBC analyst speculates on one big natural gas pipeline to Kitimat as rumours persist that Apache decision on KM LNG will come next week

There is increasing speculation in the financial and energy markets that Apache Corporation, the lead investor in KM LNG partners, who propose to build the Kitimat LNG project will announce the investment decision next week. If the decision is positive, and it is expected to be positive, that means the work underway at the Bish Cove site will ramp up to full construction.

The speculation is heightened by the fact that the two other partners in KM LNG, Encana and EOG, report the following morning. Rumours on the Kitimat announcement began after Encana delayed its announcement by a week from its normal time in early February. (At that time one energy market analyst who follows NWCEN on Twitter contacted this site to ask if there were rumours here. At that time, there were none)

Apache has scheduled a fourth quarter report conference call and webcast from its headquarters in Houston, Texas, Feb. 16, 2012, at 1 pm Central Time.

Apache has always said that the go/no-go decision on the Kitimat project would come in the first quarter of 2012.

The market speculation, however, may not be entirely good news. That’s because this morning, Andrew Potter, of CIBC World Markets, told a conference call that the rush to export liquified natural gas from northeastern BC and Alberta to Kitimat would mean building one or two large natural gas pipelines, instead of several small ones, to reach the terminal projects.

Reuters quoted Potter as saying: “There is no logic at all to seeing three to five facilities built with three to five independent pipelines,” he said.

At the moment, the just approved BC LNG project, a cooperative of 13 energy companies, plans to utilize the existing Pacific Northern Gas facilities which already serve northwestern British Columbia. The PNG pipeline roughly follows the communities it serves along Highway 16. KM LNG is in partnership with the Pacific Trails Pipeline project, which would take that pipeline across country.

The third LNG project, by Shell, is still in the planning stages, but it, too, would need pipeline capacity.

Although there is general support for the LNG projects in northwestern BC, and less controversy over natural gas pipelines, last fall, members of one Wet’suwet’en First Nation house blocked a survey crew for Apache and Pacific Trail Pipelines who were working near Smithers on that house’s traditional territory. The survey project was then stood down for the winter.

The fear among some First Nations leaders and environmentalists is that the Pacific Trails Pipeline could, intentionally or unintentionally, open the door to much more controversial Enbridge Northern Gateway bitumen pipeline, since the PTP and Northern Gateway could follow the same cross country route.

Whether or not Potter intended to stir up a hornet’s nest, he likely has. What appears to be logical and economic for a CIBC analyst in a glass and steel tower, one or two giant natural gas pipelines, is now likely going to be fed in to, so to speak, and amplify the controversy over the Northern Gateway pipeline.

Potter also told the conference call that together the natural gas projects do not have enough gas in the ground to support the export plans. That means, Potter said, more acquisitions and joint venture deals in the natural gas export sector. Bob Brackett of Bernstein Research, quoted by Alberta Oil magazine, also says there will likely be consolidation of Kitimat LNG projects, since there was similar consolidation in Australia.

Apache Corp. Fourth quarter reporter webcast page.

PNG System map — The existing Pacific Northern Gas Pipeline follows Highway 16 (PNG)

The Pacific Trails Pipeline (yellow and black) would go cross country to Kitimat. The existing PNG pipeline, seen in the above map, is marked in red on this map. (PTP)

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