Reports say Shell near deal for Kitimat LNG project, as Oliver approves the BC LNG

The Minister of Natural Resources, Joe Oliver, has confirmed the approval of the 20 year export licence for the BC LNG Export Cooperative. The National Energy Board had approved the licence in February.

Earlier the government had also approved the export for the KM LNG project.

In a statement, Oliver said, “This export licence is another example of our Government’s commitment to diversifying our energy export markets and strengthening our trading partnership with Asia. Canada is a safe, responsible, and reliable supplier of energy contributing to global energy security.”

“Canada is well positioned to grow as a global energy superpower. Projects such as this will show the world that we are serious about getting our energy resources to market.”

The liquefied natural gas facility would be located on the west bank of the Douglas Channel at small cove near Kitimat. BC LNG Export Co-operative intends to ship up to 1.8 million tonnes of liquefied natural gas annually to markets in Asia.

Natural gas would be transported to the proposed Douglas Channel terminal on the existing Pacific Northern Gas Pipeline and potentially on the proposed Pacific Trail Pipeline. The proposed liquefied natural gas facility is undergoing an environmental assessment in accordance with the Canadian Environmental Assessment Act. The initial phase of the facility is expected to be in operation by late 2013 or early 2014 and, if it proceeds, would represent the very first liquefied natural gas exports from Canada.

Meanwhile, Reuters quoting the Japanese Nikkei, reported that Royal Dutch Shell together with Mitsubishi Corp, China National Petroleum Corp and Korea Gas Corp are in the final stages of negotiations to build a US$12.35-billion liquefied natural gas (LNG) terminal at Kitimat.
The companies will ship gas from their Canadian fields for the project and expect to begin production around 2020 at an annual rate of 12 million tons, Nikkei reported.

Nikkei said a broad agreement is expected as early as this month, after which the four companies will start seeking approval for the project.

Shell brought the old Methanex site and marine terminal in Kitimat last fall.