LNG Canada nearing approval of LNG facility, servicers say
CALGARY (Bloomberg) -- The prospects for a massive gas export plant on Canada鈥檚 Pacific Coast are looking bright, according to executives of service companies that would have a hand in supporting the facility.
LNG Canada, the Royal Dutch Shell Plc-led group that鈥檚 considering building a C$40-billion ($30-billion) liquefied natural gas facility in British Columbia, is giving every indication that it鈥檚 planning to approve the project, the executives said at a panel in Calgary on Wednesday.
A flurry of activity this year in the remote Pacific town of Kitimat, where the facility would be located, has raised optimism that the project will be built, giving Canada a long-sought way to export its energy products to Asia. Those hopes got a further boost in May, when Malaysia鈥檚 Petroliam Nasional Bhd took a 25% stake in the project, joining Shell and subsidiaries of PetroChina Co., Mitsubishi Corp. and Korea Gas Corp. in the venture.
鈥淎ll the actions that they鈥檙e doing, including Petronas buying into the plant, and the cap contracts and everything else that they鈥檙e doing, really indicate they鈥檙e very close,鈥 said Dale Dusterhoft, CEO of Trican Well Service Ltd. 鈥淭hey鈥檙e just going through the list and ticking all the boxes.鈥
Fracing demand
Dusterhoft said his company would likely see increased demand for its pressure-pumping rigs if the project was built and drillers needed to increase production to supply the facility. He added that he didn鈥檛 have any inside knowledge of Shell鈥檚 thinking on the project.
Those sentiments were echoed by Horizon North Logistics Inc. Chief Financial Officer Scott Matson, whose company owns land near the site and would build the camps to house the workers building and later operating the plant. The feeling is different than the anticipation that Petronas would build an LNG plant on the coast, a hope that died a year ago when the company pulled the plug on the proposed $27-billion project. Petronas鈥檚 investment in the Shell project was the biggest move toward reviving that optimism, Matson said.
鈥淚f you think back three, four years ago when we all had LNG euphoria, that there was a slew of projects ahead of us, we certainly didn鈥檛 see any boxes being ticked to the same degree that they are today,鈥 Matson said. 鈥淥ur view internally is that the flag in the ground was Petronas buying in. We have a hard time believing they would spend an ounce of time, energy or a dollar unless they had a clean line of sight to the project moving ahead.鈥