Ministry of Aboriginal Relations and Reconciliation, Ministry of Energy and Mines, Ministry of Jobs, Tourism and Skills Training, Office of the Premier, Economy Sector, Families Sector, Cariboo Chilcotin Coast Region, Kootenay Rockies Region, Northern B.C. Region, Provincewide, Thompson / Okanagan Region, Vancouver Coast & Mountains Region, Vancouver Island / Coast Region

British Columbia to develop liquefied natural gas industry

/2011/09/british-columbia-to-develop-liquefied-natural-gas-industry.html
British Columbia to develop liquefied natural gas industry
Economy, Families Monday, September 19, 2011 1:15 PM


KITIMAT - As part of "Canada Starts Here: The BC Jobs Plan", to be formally released on Thursday, Premier Christy Clark announced British Columbia will take four key steps to create a prosperous liquefied natural gas (LNG) industry and jobs, including making the Kitimat liquefied natural gas plant operational by 2015.

"Creating a new industry with the capacity to export B.C.'s natural gas to overseas markets for the very first time will instantly increase economic prosperity and create jobs," said Premier Clark. "By adopting a more aggressive approach to the development of the natural gas sector, I am confident British Columbia can create a prosperous LNG industry that will bring local jobs to our communities and deliver important dollars into our economy."

The four steps government will take to grow a viable LNG industry in British Columbia are:

  • Greater emphasis on the permitting and decision making processes.
  • Skills training and development.
  • Investment attraction.
  • International marketing.

Premier Clark stressed the first step will be to accelerate the lengthy permitting processes and improve the decision making required to bring large-scale production facilities from a concept to a reality, and that these commitments will be a greater priority for B.C. on a go forward basis. The Province will also continue to strengthen collaboration with First Nations, local communities, industry partners and other levels of government to define more effective working relationships.

Secondly, in the area of training and development, the Province has been working with industry partners for some time on the future skills required to support a new LNG industry. The goal is to ensure the post-secondary system is able to deliver the targeted training necessary to grow the oil and gas industry, including LNG. Final details are under consideration with further details to be announced later this fall.

Thirdly, the Premier has asked key provincial officials to attract investment by working with industry stakeholders and First Nations to remove the barriers and secure the investment required to establish up to three LNG plants by 2020. As of today, the Province is aware of a handful of LNG proposals.

Presently, the most advanced project is the Kitimat LNG terminal proposed by Apache Canada Ltd., EOG Resources Inc, and Encana Corporation. This terminal is located on Haisla Nation territory. Kitimat LNG and the connecting Pacific Trail Pipeline have received the required environmental approvals. The Province continues to work with other levels of government and the project's proponents to ensure it becomes operational.

"The Kitimat LNG facility will allow north western British Columbia to diversify its economy and open up the trade opportunities to the Asian markets," said Tim Wall, president of Apache Canada. "It is thanks to government leadership that we look forward to working in B.C. for many years to come."

"The Province's assistance is timely," said Haisla Nation Chief Councillor Ellis Ross. "Our own training capacity is limited by resources and capabilities, and these have been exhausted given the projects now underway on our territory and the demands they place on our people for skills and training. Our economic future has never looked better, and this assistance will help us deliver on this promise to our community."

Once completed, the Pacific Trail Pipeline will connect natural gas from the Western Sedimentary Basin to the Kitimat LNG facility. Natural gas liquefied at the Kitimat LNG plant would be transported by vessels to markets primarily located in the Asia Pacific Region.

These two projects are each expected to create approximately 1,500 person-years of work during construction. The export terminal will create 120-140 permanent positions once it is in operation. In addition to these jobs, a successful LNG export operation would keep exploration and production activities at a high level across northeast B.C., and keep service sector workers in demand for decades.

The fourth step is international marketing and trade development. Premier Clark confirms that LNG will be an important focus of her upcoming trade missions to Asia. The goal is to begin the discussions needed to open up markets for British Columbia LNG exports.

Currently, the National Energy Board (NEB) is considering an application from Kitimat LNG for a 20-year licence to export natural gas in the form of liquefied natural gas. If approved, it would be Canada's first export licence for liquefied natural gas. The NEB is also currently considering an export license application for the smaller Douglas Channel partnership project.

"We continue to make strides in raising market awareness, and today is another step in a longer-term process," said Premier Clark. "British Columbia is highly regarded as a safe and responsible location to do business. Liquefied natural gas is an exciting development that will open up thousands of new jobs and billions of dollars in investment for our province in the years ahead."

B.C. is poised to attract new investment into our economy, creating and protecting jobs for families in every region. This is at the heart of "Canada Starts Here: The BC Jobs Plan." The plan has three pillars to help us deal with today's economic uncertainty and emerge from it stronger than ever:

  • Expanding markets for B.C. products, particularly in Asia.
  • Strengthening our infrastructure to get our goods to market.
  • Working with employers and communities to enable job creation across B.C.

Underlying these pillars are continuing commitments to ensure our skills and training programs lead the way to the jobs of tomorrow, and to maintain the prudent and fiscally responsible approach that our economy needs - and taxpayers deserve.

To accelerate growth, the BC Jobs Plan also leverages the strengths of our most competitive sectors - resource, knowledge and infrastructure - to bring new dollars into our economy from our most important trading partners.

Photos from the announcement:

http://flic.kr/p/aoWWRq

http://flic.kr/p/aoWWyG

Contacts:

Chris Olsen
Press Secretary
Office of the Premier
604 220-1640

For other Ministries:

Karen Murry
Media Relations
Government Communications and Public Engagement
250 387-0779

BACKGROUNDER

Kitimat LNG

* There are multiple investors across the natural gas industry who have expressed interest in the development of LNG exports, including the Kitimat LNG terminal; a possible terminal which is now under study by Shell Canada and international partners; and a privately-owned partnership, including the Haisla Nation, which proposes the development of a small-scale facility on the west bank of the Douglas Channel near Kitimat.

* The most advanced liquid natural gas project at this time is the $4.5-billion dollar Kitimat LNG terminal. This project is expected to create approximately 1,500 person-years of work during construction and 120-140 permanent positions once the terminal is operating, which is slated to begin by 2015.

* Kitimat LNG will be supplied with natural gas through the Pacific Trail Pipeline (PTP). This $1.2-billion dollar pipeline project is expected to create another 1,500 jobs during its construction phase.

* The proposed location for the Kitimat facility is on the Bish Cove Indian Reserve. The Province is working with the proponent, the federal government and the Haisla Nation to support the construction and regulation of the plant on Haisla Nation Reserve lands.

* Fifteen First Nations are working as a single partnership in support of the development of the connecting PTP pipeline.

* Currently, Kitimat LNG is awaiting the outcome of the federal government's decision for a 20-year licence to export natural gas at the facility. The terminal has already received provincial and federal environmental assessment approvals.

* All projects of this nature must ensure environmental concerns are addressed in British Columbia, prior to the start of construction.

* Once the export licence is granted, and the proponents make a favourable final investment decision, the Province can then work with the proponents on issuing all the necessary permits and approvals to build the plant which would be operational in 2015.

* The Province continues to work toward a Memorandum of Understanding between the proponent, Haisla Nation, and federal government confirming their commitment to see the project successfully developed.

* At that point, British Columbia will be ready, for the very first time, to ship natural gas to new, growing global markets such as Asia.

Contact:

Karen Murry
Media Relations
Government Communications and Public Engagement
250 387-0779

BACKGROUNDER

LNG Development

* Historically, B.C. natural gas exports have been confined to North America. That has changed. Today, companies are cooling natural gas to -160° Celsius, which turns it to a liquid form that can be loaded onto LNG vessels bound for overseas markets.

* Today, natural gas provides 24 per cent of the world's primary energy source. It is recognized as a clean burning fuel, and demand for natural gas worldwide is expected to increase by 44 per cent by 2035.

* In 2010, the world consumed 112 trillion cubic feet of natural gas, almost a 30 per cent increase in the last 10 years. (To provide context, B.C. produces just over one trillion cubic feet per year)

* The rapidly increasing shale gas supply in North America has resulted in a thousand cubic feet of gas costing about US $4, versus US$ 16 in Japan and Korea.

* Liquefied Natural Gas (LNG) is poised to change this by linking markets with supply and a growing appetite for natural gas.

* LNG supply is projected to grow 4.4 percent per year to 2030, more than twice as fast as total global gas production (2.1 percent annually). As a result, LNG's share in the global gas supply is expected to increase from nine percent in 2010 to 15 percent in 2030.

* British Columbia has tremendous potential within this global industry. The province has an abundant supply of natural gas to support long-term production for our domestic needs as well as continued export markets.

* Like all new economic development, it takes many years to build an industry. But the good news in British Columbia is the work began in earnest several years ago and continues today.

* In the last eight years we have introduced progressive royalty programs, increased our infrastructure, updated our regulatory framework, and generated the conditions for a booming natural gas industry.

* Market development work is underway through the New West Partnership. British Columbia is working with Alberta and Saskatchewan to market natural gas overseas.

* British Columbia is also working with the industry and other levels of government to attract industry capital and foreign investment, thereby accelerating growth in British Columbia's natural gas sector; raising market awareness of our natural gas potential; and increasing the demand for the province's natural gas.

* With LNG export potential, British Columbia will be able to support long-term job growth and create significant economic spin-offs for the service sector, First Nations and local communities.

* The Province is working with proponents of these and other major projects to accelerate development and navigate complicated regulatory and permitting functions.

* The Province is committed to consultations with First Nations and the communities that will benefit from these projects. This could take the form of revenue-sharing agreements, land-use agreements and any consultations necessary during regulatory steps to address environmental concerns.

* Although there is much more work to be done, British Columbia has been among the most successful jurisdictions anywhere in terms of developing strong, consistent guidelines that provide international investors and interested operators with the confidence they need to look at B.C. for opportunities in natural gas.

* British Columbia is a regulatory leader in ensuring natural gas activities are undertaken safely for the public and the environment. For example, the introduction of the Environmental Protection and Management Regulation as part of the Oil and Gas Activities Act last year further strengthens provincial guidelines for protecting the environment, while the Drilling and Production Regulation ensures industrial practices are done in accordance with strict safety measures.

* Thanks to this important work, companies know that B.C. is a safe, supportive jurisdiction in which to invest and build an industry.

Contact:

Karen Murry
Media Relations
Government Communications and Public Engagement
250 387-0779

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