Global oil and gas company Shell and its partners Petrochina, Mitsubishi and Kogas have taken a final investment decision (FID) to build the US$31bn LNG Canada export project in Kitimat, British Columbia, in Canada. Construction will start immediately and the project is expected to be completed by 2024-2025.
Initially comprising two processing units of 6.5 Mt/year each, the 13 Mt/year LNG project could be later extended to 26 Mt/year (option to add two similar trains). Shell is the majority shareholder in the project (40%), in partnership with Petronas (25% through the North Montney LNG Limited Partnership), Petrochina (15%), Mitsubishi (15% through Diamond LNG) and Kogas (5%). Petrochina plans to dedicate US$3.5bn, while Kogas will invest US$670m. Each joint venture participant will be responsible to provide its own natural gas supply and will individually offtake and market its share of LNG.
The main driver behind the project is its cost, which is estimated to be structurally advantaged compared to a greenfield development on the US Gulf coast. Shipments to Asia will take 10 days only, against 24 days for US Gulf Coast projects. However, the FID was put off twice in 2016 because of a difficult market situation.
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