Shell takes majority share in LNG Canada Development
The Royal Dutch Shell (Shell), and its partners, China National Petroleum Corporation (CNPC or PetroChina), Koreas gas Corporation (Kogas) and Mitsubishi Corporation (Mitsubishi) from Japan established a joint venture to design, built and operate the LNG Canada project to produce and export liquefied natural gas (LNG) out of Kitimat in British Columbia, on the West Coast of Canada.
Announced in 2011, LNG Canada is intending to lead the series of LNG export terminal projects maturing along the West Coast of Canada as the shortest route between the production fields in Alberta and British Columbia and the energy-thirsty markets in Asia.
In that respect, the alliance around Shell leadership of major companies representing China, Japan and South Korea did not happen by chance and gives the guaranty for prompt achievement of the LNG Canada project.
After this operation, the working interests between the partners in LNG Canada end up as:
– Shell 50% is the operator
– PetroChina 20%
– Kogas 15%
In LNG Canada the split of working interests between the partners will not have only a financial impact but also operational consequences as each company will have the supply gas to the LNG plant in proportion of its stake.
In practice it means that Shell, PetroChina, Kogas and Mitsubishi will have to secure long term gas supply agreement or take interests in gas exploration production in Western Canada at the level of their commitment in LNG Canada.
LNG Canada secured land at Kitimat – British Columbia
In February 2014, Shell, PetroChina, Kogas and Mitsubishi closed a deal with Rio Tinto to accommodate available land adjacent to its existing aluminium smelter along the Douglas Channel in Kitimat that could host the LNG Canada project.
In a first phase, the LNG Canada project should include:
– Natural gas receiving facilities
– Two LNG Trains
– LNG loading lines from tanks to wharf
– Marine export facilities to upload two LNG carriers