Kitimat, British Columbia, is full of excitement now that the federal government has given the green light for a proposed LNG project (liquefied natural gas) that would create jobs for thousands of construction workers.

The project is headed by five industry giants; Korean Gas Corp., Royal Dutch Shell, PetroChina Co., the Malaysian-owned Petronas, and Mitsubishi Corp.

The start of the project

Already, a work camp has started to shape up in Kitimat which the local residents have perceived as evidence that LNG Canada, led by Royal Dutch Shell PLC will start working on the construction of the terminal that would cool down natural gas into its liquefied form. Then, the liquefied form, i.e., LNG will be shipped off to the energy-thirsty consumers of Asia.

Work on the project has already started. Trucks filled with gravel have been spotted going back and forth the place where the camp is to be set up. These trucks have been involved in the preliminary preparation for the work camp which has been named the Cedar Valley Lodge and is being headed by Bird Construction Inc. and Civeo Corp.

BC LNG project to create numerous job and real estate opportunities

The LNG Canada project has a budget of $40 billion. The project incorporates the export terminal as well as TransCanada Corp.’s plan to construct a pipeline spread over 670 kilometers. The pipeline would be responsible for carrying the natural gas from Dawson Creek located in northeast British Columbia to the coast of Kitimat where the new processing plant is placed. At this plant, the gas will be liquefied for export overseas.

The construction of the terminal alone would need approximately 4,500 workers just during the construction phase. The number includes the staff needed for certain tasks like the assembly of the LNG modules that are to be imported from China.

Then, it is estimated that another 2000 workers will be needed to build TransCanada’s proposed Coastal GasLink route which is a $4.8 billion project.

With the increasing job opportunities, numerous real estate opportunities would also come up since the workers will need to be housed at least until the end of the project.

More about the LNG project

It has also been announced that Ottawa told LNG Canada that it agrees with the fact that the terminal will have to be constructed using imported LNG modules. And, if the idea is endorsed by the federal agencies, then LNG Canada would be able to avoid substantial tariffs.

Meanwhile, the federal Liberal government agrees with LNG Canada that no domestic supplier is suitable for the huge LNG modules needed. However, the Finance Ministry is still waiting for a tariff ruling from the Federal Court of Appeal which is expected to come within weeks before it makes a decision on relieving companies from the duties on fabricated industrial steel components. These steel components are needed for the LNG modules that are up to 10 storeys tall.

Obstacles faced by the project

While the residents of Kitimat are optimistic about the project, Shell along with its partners is still concerned about the possible obstacles that the project will have to face. One problem the project is already facing is posed by Mike Sawyer, an environmentalist that has challenged whether TransCanada has the regulatory approval needed to build the GasLink pipeline.

On the other hand, David Johnson running for Kitimat mayor is helping to organize pro-LNG rallies in Kitimat, and the city is pretty pumped up!

Benefits Kitimat would get to enjoy!

The general manager of the Hirsch Creek Golf and Winter Club in Kitimat, Winston Michell, stated that the construction of this project would provide an exceptional boost to the economy of northern British Columbia. Generally, businesses are quite optimistic and hopeful for the final decision to be positive.

In a statement, Shell Canada commented that the consortium would definitely come up with the FID (final investment decision) by the year’s end. Of course, the exact date only depends on the joint ventures participating in the FID to make a decision based on the affordability and competitiveness of the project and the global energy markets.

Last spring, the B.C. NDP government had announced a new LNG tax package which was aimed to entice investors of LNG Canada to go ahead with the project. According to the government, the package also aimed to bring the development of natural has on a level playing field with the other industries.

LNG Canada could get to enjoy an estimated $6 billion in tax breaks and would also be able to get relief from provincial sales tax. LNG Canada could also get to enjoy the elimination of the LNG income tax and their preferred industrial electricity rates.

The ministries of Finance and Energy of British Columbia states that the project is estimated to generate a direct government revenue of $22 billion in the next forty years.

At the same time, this LNG Canada project is also expected to employ up to 10,000 people during the construction and will be able to offer up to 900 full-time jobs.

The bottom line

The CEO of LNG Canada, Andy Calitz, has stated that the company is already started on the construction of the plant and the plant. He further stated that the project had gotten all the approvals needed to break ground. LNG Canada has been able to get approvals from BC Hydro, the National Energy Board, 25 First Nations, as well as the Department of Fisheries and Oceans.

Furthermore, information provided by British Columbia, it is clear that despite being a large LNG facility, LNG Canada would be the least greenhouse gas intensive LNG facility of the world.