The Shell-led LNG Canada export project continues to progress work at the 14 mtpa plant in Kitimat in order to start production in the middle of the decade.
The giant project, worth more than $30 billion, is now more than 60 percent complete, according to LNG Canada’s mid-year update.
Besides Shell, LNG Canada partners include Malaysia’s Petronas, PetroChina, Japan’s Mitsubishi Corporation and South Korea’s Kogas.
LNG Canada and its EPC contractor JGC Fluor have to date “awarded more than $3.7 billion in procurement and contracts to companies in British Columbia,” LNG Canada’s new CEO, Jason Klein, said in the update.
“And of that amount, almost $3 billion has been awarded to local and Indigenous companies,” he said.
TC Energy’s Coastal GasLink project, which will supply natural gas to the LNG Canada export terminal, is also continuing to progress with the construction of the pipeline in British Columbia.
LNG Canada and Coastal GasLink previously said they were in commercial discussions regarding the cost and schedule for the project. Previoulsy the project had a price tag of more than C$6.6 billion.
“We’re happy to share that LNG Canada and its joint venture participants have come to a commercial resolution with Coastal GasLink to address its cost and schedule performance,” Klein said in the update.
“This positive step allows both companies to move forward with a renewed focus on ensuring the pipeline is constructed safely, within the revised cost estimate, and in time for first LNG cargo by the middle of this decade,” he said.
Klein did not provide any further information regarding the deal.
Costs nearly doubled
TC Energy said in its second-quarter report on Thursday that the pipeline now has a price tag of C$11.2 billion.
“The revised agreement allows us to continue the safe and timely execution of the 670-kilometre project which is now approximately 70 percent complete, with two of eight sections finished and expected mechanical in-service by the end of 2023,” it said.
TC Energy said funding of the increased project cost estimate would be supported by an expansion of the existing project-level credit facilities and a further equity contribution by TC Energy.
It will initially make an equity contribution to Coastal GasLink of C$1.9 billion, with no resulting change to its 35 percent ownership.
Also, the firm expects to reach mechanical in-service by the end of 2023.
“We continue to believe the project remains economically viable and subject to a final investment decision, we anticipate a potential second phase of Coastal GasLink could enhance TC Energy’s project returns,” the firm added.