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Shell JV affirms commitment to start building C$40B LNG export project in 2018

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Shell JV affirms commitment to start building C$40B LNG export project in 2018

The CEO of the Royal Dutch Shell PLC-led LNG Canada reaffirmed the company's commitment on starting up construction on its proposed C$40 billion LNG gas export facility in 2018, Reuters reported May 15.

The project had been scheduled to receive a final investment decision in late 2016, but the decision was postponed due to market conditions. A statement from British Columbia's government said it anticipates LNG Canada will make a final investment decision by the end of 2018. The government also offered the project tax breaks and other incentives.

"It didn't make sense in July 2016," said LNG Canada CEO Andy Calitz at an LNG conference. "When [our stakeholders] asked the inevitable question, when will you reconsider the FID? Our answer was: We will be in construction in 2018. I reaffirm that commitment today."

LNG Canada asked the country's finance ministry for an exemption from the 45.8% anti-dumping tariffs applicable to certain fabricated industrial steel components, or FISC, typically imported from Spain, South Korea and China. Reuters noted that LNG trains, most of which are built in Asia, are FISC components.

Calitz told reporters that a "trade spat" over imported FISC, will neither pose an issue for the project nor impact an investment decision by the joint venture partners, the report said.

LNG Canada is a joint venture owned 50% by Shell Canada Energy Ltd., 20% by an affiliate of PetroChina, and 15% each by affiliates of Japan's Mitsubishi Corp. and South Korea's Korea Gas Corp.

TransCanada Corp. will build the pipeline.