First LNG Canada Cargo Could Deliver Earlier Than Planned, Shell Says

© aerial-drone / Adobe Stock
© aerial-drone / Adobe Stock

Shell-led LNG Canada, the country's first natural gas export terminal, could deliver its first cargo earlier than previously planned, an executive at the British company said.

The C$40 billion ($29 billion) liquefied natural gas (LNG) project in British Columbia is in the final stages of construction ahead of its planned startup in mid-2025, Shell's head of integrated gas and upstream Zoe Yujnovich told Reuters in an interview.

The giant project is central to Shell's ambitions to grow its gas liquefaction capacity by 25-30% between 2022 and 2030 to around 40 million metric tons per year (mtpa).

"It's always a balance between when we may get the first cargo, which indeed could well be earlier, versus what I'm really looking for that is a sustainable drumbeat of every cargo that we get coming routinely and consistently," Yujnovich said.

"You can get slightly earlier cargoes but you may  need to then do additional work that comes after that," she added, without giving more details.

Shell is the world's top trader of LNG, which it says will play a central role for decades even as economies seek to phase out their reliance on fossil fuels.

LNG Canada, which will produce 14 mtpa at its first phase of development, is a joint venture between Shell, PetroChina 601857.SS, Malaysia's Petronas, Japan's Mitsubishi Corporation and South Korea's Kogas.

The Kitimat terminal will process up to 2 billion cubic feet per day (bcfd), representing 11% of current Canadian gas output and making it a major source of revenue for the provincial and federal governments.

The project partners are working on the final aspects of the project such as the installation of units after the completion of TC Energy's TRP.TO Coastal GasLink pipeline into the terminal, Yujnovitch said.

A decision on whether to go ahead with the second phase of the project is expected towards the end of this year, as the partners assess the costs of the expansion, including the impact of proposed government rules on carbon emissions and power generation, she said.

(Reuters - Reporting by Ron Bousso, Editing by Mark Potter)

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