The company Chevron Canada Limited has decided to implement one of the largest liquefied natural gas projects, the Kitimat LNG project. To realize this project, they first sold 50% of the project to an Australian company, Woodside Petroleum.
Thus, this project is a 50/50 joint venture between Chevron Limited and Woodside Energy International. One of the objectives of the project, if completed, is to create a 471km pipeline from Summit Lake, north of Prince George, to Bish Cove, where a gas liquefaction plant and port facilities would be built. The Kitimat LNG plant includes up to three LNG trains totaling 18 million tonnes per year (6.0 MTPA/train), and is an all-electric plant powered by clean, renewable hydroelectricity from BC Hydro (a Canadian company).
To achieve this project, Kitimat LNG has also established partnerships with First Nations that are unique in the Canadian energy industry. In particular, this project has received strong support from local Aboriginal communities throughout the value chain. Kitimat LNG has entered into a benefits agreement with the Haisla Nation for the liquefied natural gas plant, located on Haisla Nation reserve lands. In addition, an agreement with the 16 First Nations along the proposed Pacific Trail pipeline route through the First Nations Limited Partnership (FNLP). These agreements address training, employment, procurement of goods and services, environmental management and financial benefits for First Nation partners.
In addition, Chevron and Woodside will also build on their expertise and experience in the design, construction and operation of world-class LNG facilities. Indeed, Chevron and Woodside collectively operate approximately 15% of the world’s LNG production (12 LNG trains) and safely loaded over 500 cargoes in 2018. Finally, Kitimat LNG has a 20-year LNG export license from the National Energy Board with a capacity of 10 million metric tons per year. Finally, all major provincial and federal environmental assessment certificates for the Kitimat LNG plant and the Pacific Trail pipeline are in place. At the Bish Cove plant site near Kitimat, Chevron and Woodside are proposing to build the world’s first all-electric LNG plant, powered by renewable hydroelectricity from BC Hydro. This design eliminates the need for natural gas-fired turbines. As envisioned, the plant will set the global standard for the lowest emissions intensity of any large-scale LNG facility. The plant features an advanced compact module design for low cost operation, high efficiency and high availability.
However, the giant Chevron Canada Limited has been dealt a blow, and it has come fast. On Tuesday, May 15, 2021, Woodside Petroleum announced its intention to sell its 50% interest in the Kitimat LNG project. No buyer has come forward since then, and the U.S. company, Chevron Limited, has indicated that it is no longer funding further feasibility work. Unlike LNG Canada, another industrial energy project whose natural gas liquefaction plant and export terminal, which will be fed by the Coastal GasLink pipeline, is also located in Kitimat, construction of Kitimat LNG has not yet begun.
Nevertheless, the Kitimat LNG project would aim to replace the consumption of coal, as in Asia, with the consumption of liquefied natural gas. In addition to having a positive impact on the environment, Kitimat LNG would also create jobs.