Shell: Canada LNG Project Could Cost up to $35.2b
Royal Dutch Shell Plc , the lead partner in the consortium planning the LNG Canada facility on British Columbia's remote northern coast, said on Friday the project to liquefy natural gas for export to Asia could cost as much as C$40 billion ($35.3 billion) when fully complete.
Shell's cost estimate for the LNG Canada facility near Kitimat, British Columbia, was included in the environmental assessment filed with provincial regulators on Friday.
The filing begins a 180-day review of the proposal but the company cautioned it and its partners have not yet decided whether to build the plant.
"While today's announcement is an important step forward for the proposed project, LNG Canada must ensure the project is economically viable and meet several other significant milestones related to gas supply, engineering and cost estimates, supply of labor and regulatory approval prior to making a final investment decision," Shell said in a release.
Shell said it believes the facility will cost between C$25 billion and C$40 billion. However, even at the lower end of that range LNG Canada would among the costliest construction projects ever proposed in the country.
The estimate is for when the project is fully built out, with four trains liquefying as much as 24-million tonnes of Canadian natural gas annually for shipment to the Asian market.
In its application for an environmental assessment certificate, Shell said the plant will emit 0.15 tonne of carbon dioxide per tonne of LNG, which it said is below the emission standards introduced last month by British Columbia's government and will make it one of the least CO2-intensive LNG facilities in the world.
Shell has a 50 percent stake in the project, which will initially produce some 12 million tonnes of LNG per year. PetroChina Co Ltd has a 20 percent share while Korea Gas Corp and Mitsubishi Corp each hold 15 percent.
(1 US dollar = 1.1348 Canadian dollar)
(Reporting by Scott Haggett; Editing by Chizu Nomiyama and Marguerita Choy)
