Back to Blog
28 May

LNG Canada says it is committed to starting construction on Kitimat, B.C., project in 2018

Latest News

Posted by: Shahin Golestani

The chief executive of the LNG Canada project on British Columbia’s northern coast said on Tuesday that the company was committed to starting construction on the $40 billion liquefied natural gas export project this year.

An investment decision on the terminal in Kitimat, B.C., was delayed in 2016, due to sagging oil prices that hit cash flows, along with an unfavourable supply-demand outlook, but remains on track for 2018, Andy Calitz said at an LNG conference on Tuesday.

“It didn’t make sense in July 2016,” he said. “When [our stakeholders] asked the inevitable question, when will you reconsider the FID? Our answer was: We will be in construction in 2018. I reaffirm that commitment today.”

Calitz later told reporters that a trade spat over imported fabricated industrial steel components (FISC) was no longer an issue for the project and would not have any impact on an investment decision by the joint venture partners.

Slight backtrack

As word of Calitz’s comments spread, LNG Canada issued a statement, reiterating the fact that no final investment decision has yet been made.

“LNG Canada is currently preparing to submit a Decision Support Package for review by our Joint Venture Participants (JVPs) later this year. However, the exact date for an FID is up to the JVPs to make,” said director of external relations Susannah Pierce.

B.C. Energy Minister Michelle Mungall made the same observation but said the government was “very encouraged” by Calitz’s comments.

“It’s good to see that so many people in B.C., investors as well, are excited to see these types of projects go forward,” she said, adding that the government’s offer of providing a break on carbon taxes and an exemption on provincial sales taxes related to construction costs played a key role.

“We know the framework was very important to this. We need to make sure that B.C. is competitive.”

Tariffs no longer an issue

LNG Canada had asked Canada’s Finance Ministry to exempt it from the 45.8 percent anti-dumping tariffs, which apply to certain FISC components imported from Spain, South Korea and China. LNG trains, most of which are built in Asia, are FISC components.

Calitz did not make clear why the FISC duties were no longer an issue, but said the modules have been contracted and the company has more clarity on the parameters and legal application of the tariffs.

LNG Canada is a joint venture between Royal Dutch Shell Plc (RDSa.L), PetroChina Co Ltd (601857.SS), Mitsubishi Corp (8058.T) and Korea Gas Corp (036460.KS). TransCanada Corp (TRP.TO) will build the pipeline.

 

Source: Thomson Reuters ·

With files from Justin McElroy  http://www.cbc.ca/news/canada/british-columbia/lng-canada-committed-to-starting-construction-in-2018-1.4664489

 

 

For Industrial and Commercial Loans, Equipment Leasing and Finance, contact me at: shahingolestani@dominionlending.ca

 

Large Industrial, Commercial and Construction Loans, Equipment Leasing and Finance for major industries:
Infrastructure, Construction, Real Estate, Energy (Electrical power, Petroleum), Mining, Transport, Water, Manufacturing (Automotive, Electronics, Pulp and paper, Steel, Shipbuilding), Health care, Hospitality, Agriculture (Fishing, Timber, Tobacco), Chemical (Pharmaceutical), Aerospace, Food, Education, Computer (Software, Technology), Entertainment, Information.

Large Construction/Development and Land Loans:
Condominium Construction Loans for low, mid and high-rise,
Single Family and Townhome Projects Loans,
Commercial Construction Loans – Construction of Single or Multi-Tenant, Commercial Buildings such as Retail, Industrial, Office, Storage, Hotel,Multi Unit Residential,
Commercial Mortgages on Investment Properties, Private mortgages/loans.

Commercial Loans: commercial buildings, hotels and motels, Gas Station, new residential, condominium construction, seniors housing, development lands, apartment buildings, automotive dealerships, industrial buildings, golf courses, recreational resort properties, plazas and shopping centers, cinemas, churches and temples, parking lots/garages, multi-family residential, recreation-vehicle parks, private schools, subdivision servicing, builder inventory loans, condominium conversion projects, storage facilities, Offices and Medical Buildings, Business, Franchise, Restaurant, Coffee Shop, Yoga and Fitness, Medical Spa, Loans for Business Capital, Business Loans

Residential Mortgage: First Time Home Buyer, Refinancing Options, Second Mortgage, Home Renovation Loans, Loans for Temporary Needs, Mortgage for Self – Employed / and Business Owners who have trouble meeting the criteria of traditional lenders – Debt Consolidation Loans / improve your credit rating / reduce your monthly payments / consolidate multiple monthly bills into one!