There is growing optimism in political and construction circles that the shovels will soon be in the ground for a $40-billion liquefied natural gas (LNG) export facility in Kitimat, on the coast of British Columbia.
The provincial government and Kitimat council, along with contractors and trades, are anticipating the project, which would be the largest single infrastructure investment in B.C.’s history, will soon get the green light.
B.C. Premier John Horgan said in a statement prepared for the Journal of Commerce that he expects a decision within months.
“We are encouraged by the commitment and progress LNG Canada continues to show, and we are optimistic a final investment decision will be announced by the joint-venture partnership later this year.”
Horgan said the project will bring economic opportunity to the province. B.C. sweetened the pot for LNG by providing a provincial sales tax exemption on construction costs of the facility.
“Our analysis shows that this project could contribute hundreds of permanent jobs and tens of billions in revenues to support the services people rely on,” Horgan said.
LNG Canada is a joint venture between Royal Dutch Shell Plc, PetroChina Co. Ltd, Mitsubishi Corp and Korea Gas Corp.
In 2016, an investment decision on the terminal was delayed due to low oil prices and lower than expected supply compared to demand.
It is looking very positive. Companies have moved into town and set up shop
— Phil Germuth
Kitimat Mayor
Earlier this year, Andy Calitz, the head of LNG Canada, committed that his company will start construction on the LNG facility this year. However, the company later put out a statement, indicating it still has not made a final investment decision.
Kitimat Mayor Phil Germuth said he “absolutely believes” the project is going ahead, judging by the increase in building activity, “but nothing is guaranteed until all five joint venture partners make their decision.
“It is looking very positive. Companies have moved into town and set up shop and they’re still continuing to do a lot of work.”
Indeed, the signs are positive.
In April, a partnership of Texas-based Fluor Corporation and Japan-based JGC Corporation were selected as the engineering, procurement and construction contractors for the facility. The contract award was conditional on the project partners making a final investment decision.
In July, Houston-based Civeo Corp. was awarded a contract to supply temporary work camps at four locations along the Coastal GasLink pipeline on the condition that that the terminal is built.
Germuth said there has been a lot of preparatory work taking place around Kitimat and a dredging machine was brought in to do work where the terminal would be built.
“It certainly is way more positive than negative,” he said.
A couple of months ago, Germuth hosted a banker from Barclays Bank Plc in the U.K. who was in Kitimat to examine the project. In May, he also met officials who were reporting to Mitsubishi Corp., one of the project partners.
He said LNG has been working with the community, and with people along the pipeline route, for years now in preparation for the project, even building a condo complex in the centre of town and houses.
“They want to make sure everything goes as smooth as possible. They’ve gone a great job of working with everybody in the community,” he explained.
While contractors and skilled trades are already going full guns on other projects around the province, representatives say they are ready, willing and able to build the LNG facility.
Rieghardt van Enter, B.C. regional director for the Progressive Contractors Association of Canada, said the project will put a strain on an already-taxed pool of skilled trades, but the province will be OK because contractors will bring in workers from Alberta and other western provinces where work is slowing down.
“LNG Canada and the different trade groups have been pretty good at planning for this and getting prepared,” he said. “Yes, it will add pressure, absolutely, no question, because any time you add a project that size it’s going to add some pressure. But, I don’t think it’s going to artificially kill any project or any sector because we have the benefit of being able to draw upon the skilled trades from Alberta.”
Tom Sigurdson, executive director of the British Columbia Building Trades Council, said he’s not too concerned about crewing-up the project. His main concern is making sure enough apprentices are trained so they can do maintenance work when the project is completed.
LNG Canada has committed to having apprentices comprise 25 per cent of the skilled trades workforce during construction, he said, so there should be enough trades available for maintenance work afterwards.
“LNG Canada wants to make sure that the people working on the build of their projects are able to get their Red Seal so that they can have maintenance workers,” he said.
Just look at all the foreign companies getting contracts! Jobs for Canadians? No so sure! Don’t we have any Canadian companies that can supply work camps? What happened to ATCOand Brito?