Second Kitimat area LNG project moves forward with NEB process

A drawing of the original plans for the Kitimat LNG project from 2015..
An application  with the NEB on Monday has the joint project
of Chevron/Woodside back on the books and potentially moving forward

Just days after the NDP government introduced its new tax proposals for the LNG industry, a second Kitimat area project is making some news, as the Chevron/Woodside partnership looks to advance their Kitimat LNG project.

As we outlined yesterday, the BC Government is in the process of revising the tax structure considerations for LNG development, with the Chevron/Woodside interest perhaps indicative of just how welcome that news has been to would be investors in the province,

The project which was one of the first to be announced in the heady days of our LNG enthusiasm on the North Coast was put on the back-burner three years ago, as Chevron explored other options with more reasonable returns for that period of time.

On Monday however the prospects for Ktimat LNG appeared to have moved forward for the two partners; as the pair of energy giants applied for a 40 year export licence to ship liquefied Natural Gas to export markets from a terminal facility at Bish Cove.

The project will also include 17 kilometres of pipeline that will connect the Main Terminal to existing or new natural gas pipeline infrastructure in the Kitimat region.

Some of the key elements to the new application include:

The proposed Kitimat LNG Terminal will consist of a natural gas liquefaction plant and the associated infrastructure and port facilities, including natural gas delivery, liquefaction, LNG storage, and LNG send-out facilities inclusive of marine off-loading. The liquefaction component of the Kitimat LNG Terminal will consist of two trains each with a sustainable annual output capacity of LNG equivalent to 8.2 109 m3 in gaseous form, with an option for a third train of the same capacity.

Construction and operation of the Kitimat LNG Terminal will require the approval of multiple provincial and federal authorities, which will be sought independently from this Application. The commissioning of the Kitimat LNG Terminal is anticipated to be no later than 2029, depending on the pace of regulatory approvals and a final investment decision by the project's sponsors. Timing could be influenced by a number of project variables, including project economics.

Gas supply for the Kitimat LNG Terminal will come from Western Canada, from Chevron and Woodside's equity gas resources and potentially from third parties, including short, medium, and long term gas purchases.

The full application to the National Energy Board can be reviewed here.

Kitimat remains on the Chevron/Woodside development map,
with the two International energy giants applying for a 40 year
export permit for their proposed Bish Cove LNG facility
(Map of Chevron world projects from website)

Industry observers note that the forty year term for the export licence, will double the previous application request which was for a twenty year term.














No timeline towards development and when the two partners would expect to ship their first LNG shipment was indicated in the documentation submitted on Monday. The request for for a lengthy export licence is an indication that the two companies are looking to keep their options open with a first shipment to come for a period of time of up to ten years from the date of approval, if granted.

Chevron is an original investor in the Kitimat LNG project, Woodside came on board after it abandoned its own plans for an LNG Terminal at Grassy Point near Lax Kw'alaams.

Of note from yesterday's news is that there is no mention of the Malaysian energy giant Petronas, which had been rumoured to be looking to join in on the Kitimat project, that after it cancelled its own Terminal plans for the Prince Rupert area back in 2017.

The silence on the Petronas investment could be something to watch further as the Kitimat LNG plans continue to move forward, with perhaps the Malaysian company still considering its own terminal options once again,

With the two partners refreshing their interest in the Kitimat facility, you can follow any future notes on their plans through our Kitimat LNG archive page here.

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