B.C. LNG exports take a step forward with TransCanada announcement
TCPL to build $5.1 billion pipeline that will feed coastal terminal
If you’re keen on seeing liquefied natural gas (LNG) exported from the coast of British Columbia, Wednesday was a good day.
TransCanada Corp. announced today that it will build the Prince Rupert Gas Transmission project, a pipeline that will ship two billion cubic feet per day of natural gas from the Montney region to a planned LNG export terminal Progress Energy Canada Ltd. hopes to build near the northern B.C. port of Prince Rupert.
This announcement – along with Chevron taking over as operator and buying a 50 per cent interest in the already-approved Kitimat LNG project – is a clear sign that B.C. (and Canada) is inching closer to being an actual exporter of the chilled fossil fuel rather than just talking about it all the time.
Chevron’s entry into the Kitimat LNG project is important because the project now has an owner with experience delivering LNG long-term to customers (i.e. Japan) that desperately need the fuel.
The fact that the project’s other owner, Apache Canada Ltd, and the two companies Chevron bought out – EOG Resources Canada and Encana Corp. – didn’t have that track record was one of the reasons (the desire in Asia to change oil-indexed pricing is another) experts say Kitimat LNG hasn’t been able to get any customers to sign on to long-term contracts to buy the stuff.
The fact TransCanada has been picked by Progress Energy (owned by Malaysia’s Petronas) to design, build, own and operate the 750-kilometer pipeline to Prince Rupert gives this project some street cred as well, considering TransCanada’s long history building and operating natural gas pipelines throughout North America.
But the Prince Rupert LNG project hasn’t even been sanctioned by Progress, nor has an export application been filed with regulators. Meanwhile, Chevron and Apache still have that pesky issue of not having any sales contracts to underpin Kitimat LNG. And time is ticking as competitors like Australia and East Africa have designs on exporting LNG to Pacific Rim markets as well.
However, if you’re a LNG export cheerleader, today is a day to revel in some progress – albeit with the knowledge that there are many more hurdles to overcome before that first shipment of LNG leaves the B.C. coast.
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