Shell-led JV preps for ‘critical’ step to enable start-up of Canada’s first LNG export project

LNG Canada, a joint venture company encapsulating Shell, Petronas, PetroChina, KOGAS, and Mitsubishi, is setting the stage to begin operations by mid-2025 at its giant liquefied natural gas (LNG) export terminal in Kitimat, Canada’s British Columbia. 

Following the placement of the final weld on the first production train at the Shell-led LNG Canada project, described as one of the largest energy projects in Canadian history, further progress was made by Fluor and JGC Corporation, which make up the JGC-Fluor joint venture in charge of delivering multiple aspects of the megaproject.

As a result, LNG Canada plans to take delivery of an LNG cargo in early April 2025 at its marine terminal in Kitimat for equipment testing. This delivery is seen as “critical” to the safe start-up and commissioning process, now underway, and to achieve the first cargo by the middle of 2025. Currently, LNG Canada is in the commissioning and start-up process; thus, it has not begun operations or started producing LNG.

While a vessel will deliver liquefied natural gas to test and commission the facilities as the Shell-led JV prepares for its first cargo by the middle of 2025, additional import LNG shipments to the LNG Canada facility are not anticipated.

“Most modern LNG projects receive LNG in their commissioning and start-up processes. Introducing LNG to our facility is required to cool our LNG tank and operate equipment at cryogenic (low temperature) conditions in early testing,” explained the Shell-led player.

The LNG carrier will notify Canadian authorities, such as Transport Canada, Canada Border Services Agency, and Canadian Coast Guard, 96 hours before it arrives at the Triple Island pilot station (Prince Rupert), where a team of BC Coast Pilots will board the LNG carrier and guide it to the LNG Canada marine terminal in Kitimat, a distance of 159 nautical miles.

The operator explains that one of the escort tugs from HaiSea Marine, a joint venture between the Haisla Nation and Seaspan, will be at the pilot station to provide escort service to the LNG carrier during this transit. Upon arrival in Kitimat, HaiSea Marine harbor tugs will assist the carrier in berthing at the LNG Canada marine terminal jetty, where LNG loading arms will connect to the vessel’s loading manifolds and be cooled in preparation for the LNG transfer.

Afterward, LNG from the carrier will be delivered ashore via the LNG Canada loading line in phases to cool down pipework and the project’s LNG storage tank. The discharge may take three to four weeks to complete, allowing the LNG carrier to be boarded by BC Coast Pilots, un-moored, and sailed out under their guidance with the assistance of HaiSea Marine harbor tugs. Once the BC Coast Pilots disembark at the Triple Island pilot station, the ship will depart Canadian waters.

LNG Canada outlined: “Ensuring safe shipping on B.C.’s waterways is our top priority. Our dedication to the highest safety standards and industry best practices ensures that we protect our local communities and environment, both on land and at sea. We welcome opportunities to work with local authorities and stakeholders to protect the waters we share, and to monitor and mitigate impacts to the environment, marine mammals, and nearby communities.”

The construction of the project began in 2018. Initially, it is expected to produce 12.7 metric tons (14 million tons) of LNG per year, putting the Great White North on the map of LNG-exporting countries. The cumulative value of the LNG Canada project’s contracts and subcontracts to local, Indigenous, and other businesses in B.C. has surpassed $4.7 billion, entailing more than $3.8 billion to Indigenous-owned and local area businesses.

A $500 million contract enables HaiSea Marine to provide harbor and escort tugboat services to LNG Canada with its fleet of battery-powered and low-emissions vessels. This project will include a natural gas receiving and LNG production unit and a marine terminal to accommodate two LNG carriers, a tugboat dock, and LNG loading lines.

Additionally, the project will entail LNG processing units, storage tanks, a rail yard, a water treatment facility, and flare stacks. The production capacity will be 14 million tons per annum (mtpa) from the first two trains, with the option to double this by expanding to four trains later.

Currently, Canada has seven LNG export projects and one infrastructure project in various stages of development, representing a possible capital investment of almost $109 billion and a potential production capacity of 50.3 mtpa of LNG. There are also four LNG liquefaction facilities and two LNG import facilities operating in Canada that serve the domestic market, mostly at low volumes.

However, LNG Canada in Kitimat is expected to be the country’s first large-scale LNG export facility upon completion, with the majority of the other projects targeting the start of operations between 2027 and 2030.