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Shell’s LNG Canada terminal is more than 90 percent complete and the project is preparing to launch commissioning activities later this year, according to Shell’s CEO, Wael Sawan.
This is the first large LNG export terminal in Canada. Contractor JGC Fluor is constructing the first phase of the giant LNG Canada project that includes two liquefaction trains with a capacity of 14 mtpa in Kitimat, British Columbia.
Last year, TC Energy’s Coastal GasLink pipeline, which will supply natural gas to the LNG Canada terminal, was mechanically completed.
Besides operator Shell, other partners in the project include Malaysia’s Petronas, PetroChina, Japan’s Mitsubishi Corporation, and South Korea’s Kogas.
LNG Canada said in the December update that the project was more than 85 percent complete and that it expects to begin start-up activities, which will last more than a year, in 2024.
The JV confirmed in the update that it expects to ship first cargoes “by the middle of this decade”.
Shell’s CEO Sawan told analysts during Shell’s fourth quarter earnings call on Thursday that the Coastal GasLink pipeline is “ready and available to ramp up through the course of 2024.”
He said that the facility itself at Kitimat is now just over 90 percent complete as per the report from the joint venture.
“So, they’re making good progress. And we would expect that later this year, they would start up the commissioning of the plant,” Sawan said.
“That, of course, takes several months, well into 2025. But it’s comforting to see the progress that is being made. And of course, once we start producing those commissioning cargoes will be made available from day one to our foundational customers as you would expect,” he said.
The CEO did not say whether LNG Canada is expected to produce its first cargo in 2025 or sooner.
“This is a very, very complex facility that’s going to be ramped up. And therefore, we are going to watch it and to support the team as they do that through the course of the coming 12 months to 18 months,” Sawan said.
Speaking of commissioning cargoes, Sawan also discussed the ongoing dispute Shell has with US LNG exporter Venture Global LNG over the launch of commercial operations at the latter’s Calcasieu Pass plant in Louisiana.
Calcasieu Pass produced its first LNG on January 19, 2022, moving from FID to LNG production in 29 months, and the first commissioning cargo left the facility on March 1.
However, the US firm has not yet declared commercial operations at the facility.
The plant has a capacity to produce 10 mtpa of LNG or 1.3 billion cubic feet per day (Bcf/d).
Long-term customers of the facility include Shell, BP, Edison, Repsol, Galp, and PGNiG.
Shell previously launched arbitration proceedings against Venture Global.
Sawan told analysts that Venture Global has sold around 250 commissioning cargoes up to date.
“And what we see is that the plant is at or near capacity and has been consistently. So, we’re very much focused on continuing to enforce our legal rights and protect the sanctity of contracts that are there. I won’t get into the details of the legal proceedings,” he said.
“Suffice it to say that we have pulled on the lever of arbitration that exists for us and continue to have the required discussions to be able to fundamentally point out that this is not just an issue between two counterparts. Actually, it’s many counterparts, all of whom are not receiving the offtake commitments that Venture Global had committed to,” he said.
“But also, it starts to undermine the confidence in US LNG for the longer term, something which, of course, with the recent announcement of the pause by the US administration, just continue all to erode that confidence in the longer-term potential of US LNG, which is a real shame, I think, given the potential it has,” he said.
The Biden administration recently said it would “temporary pause” pending decisions for LNG export terminals.
The US will pause pending decisions on exports of LNG to non-FTA countries until the Department of Energy can update the underlying analyses for authorizations, it said.
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The post Shell CEO: LNG Canada to start commissioning later this year appeared first on Energy News Beat.
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