LNG Canada intends to follow through on plans to have massive modules for its $40-billion export facility in Kitimat, B.C. manufactured and pre-assembled at fabrication yards overseas and shipped to the site despite vehement objections from the Canadian Institute of Steel Construction (CISC).
Susannah Pierce, director of external relations at LNG Canada, says the company has no plans to change its strategy because there are no facilities in Canada that could make the required modules.
“Through mod yard prequalification work, prior experience within our joint venture participants, and the market assessments that we completed, we know that there are only a select few module fabrication yards in the world that are large enough, experienced enough, have the requisite skilled labour force, and that can deliver all the approximately 200 modules in line with our construction schedule,” Pierce explained.
“There are no Canadian producers that can make the modules required by LNG Canada’s project. As well, we require a module yard that has sea access because local roads and bridges cannot carry the size and weight of the modules.”
The modules required for the project, she noted, are massive in both size and weight, ranging from 59 to 4,098 metric tonnes each. The largest modules weigh more than eight million pounds and are equivalent in height to a 12-storey building and longer than an Olympic-size swimming pool.
Pierce says the export facility will be constructed using a modular approach, with the modules sourced from fabrication yards with capacity to handle modules of the scale required for the project.
She noted LNG’s approach to construction was endorsed through the environmental assessment process and also by First Nations and local communities, as it is an important mitigating factor for managing community impacts associated with a large influx of workers to a small town.
It’s shocking that the Canadian government would be so willing to allow and encourage the use of illegally dumped and subsidized fabricated steel
— Ed Whalen
Canadian Institute of Steel Construction
However, the CISC is critical of the approach and objects to reports that Finance Minister Bill Morneau has indicated the government supports granting LNG Canada a waiver on anti-dumping duties for fabricated steel, essentially paving the way for the company to have the modules fabricated overseas and then shipped to the Kitimat construction site where they can then be assembled.
The CISC issued a statement recently claiming that, if granted, LNG Canada will undermine Canadian construction and industrial workers by giving Canada’s largest infrastructure project in history to China — a proven dumping and subsidizing nation.
The statement charges LNG Canada is looking to offshore almost the entire project by using the modularization approach to construction.
“It’s shocking that the Canadian government would be so willing to allow and encourage the use of illegally dumped and subsidized fabricated steel, especially because the spin-off effect will see all trades suffer,” says Ed Whalen, president and CEO of the CISC in the statement.
“Our federal government has been sold a bill of goods and are taking it hook, line and sinker. To take such an important project away from Canadians is a crime. We can build complex naval ships on both coasts, but we can’t build construction modules of smaller size and complexity? It’s insane.”
The CISC, which represents the steel construction industry, a sector that employs 130,000 people, notes in its statement thousands of Canadian industrial construction jobs in plants are at risk if the government grants the waiver to LNG Canada and allows the company to sole source from China.
“Canadian construction workers want to work,” states Whalen. “We need to rely on our federal government to prioritize the needs of the middle-class and allow them to gain from this once-in-a-generation opportunity. It is paramount to the survival of the steel construction industry, the middle-class and ultimately all construction sectors to keep our construction jobs in Canada.”
The CISC states the adverse effects on the middle-class, and in turn the Canadian economy, will be felt heavily if China is allowed to have an unfair advantage by illegally dumping and subsidizing their construction products into Canada.
“Our steel construction industry currently has the capacity and the infrastructure to successfully and fairly build the structural steel components for LNG modules,” the CISC states. “It is essential to the survival of our construction workers and businesses that the Canadian government stands behind our capable industry and protects Canadians from the offshoring of these construction jobs.”
The CISC is asking the government to abide by a decision by Canadian International Trade Tribunal in June 2017 that levied trade duties against China after that country was found to be illegally dumping fabricated steel into Canada at up to 48 per cent, in addition to illegally subsidizing its industry at up to $2,300 per metric tonne.
However, Pierce maintains the modular approach is the best way to construct the facility and there will still be significant opportunities for Canadian steel workers, as steel structures will have to be built onsite along with non-process buildings and accommodations for workers.
In addition, she says, the civil and earthworks will use 13,000 metric tonnes of rebar and there will be 300 to 400 welders at the site.
“There are also significant additional opportunities upstream for new well construction and along the pipeline route. Of the total project cost, 60 per cent will be spent in British Columbia, creating substantial opportunities for British Columbia businesses and individuals seeking employment opportunities.”
The LNG facility is the single largest private sector investment project in Canadian history. The joint venture participants in the project are Shell, PETRONAS, PetroChina, Mitsubishi Corp. and KOGAS.
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