Imperial Oil says decision on Canadian LNG project still distant

CALGARY, Alberta, April 24 Thu Apr 24, 2014 3:23pm EDT

CALGARY, Alberta, April 24 (Reuters) - Imperial Oil Ltd said on Thursday it is not yet close to deciding on whether it will go ahead with a Canadian liquefied natural gas export plant it is exploring with its majority owner Exxon Mobil Corp.

Speaking to reporters following the company's annual meeting, Rich Kruger, chief executive officer of Canada's No.2 integrated oil company, said Imperial is laying groundwork for a potential project that would send LNG to Asian markets but, despite having an export license in hand, it is not yet ready to say if or when the project will proceed.

"What you're seeing from us ... is bits and pieces of moving a project forward," Kruger said. "But there's not a project until all those pieces come together. LNG projects by their nature take time."

The proposed project, which could potentially be exporting gas by 2023 according to regulatory filings, is one of several planned for British Columbia's Pacific coast to export gas from Western Canada's massive shale fields. However none of those projects, including facilities planned by Chevron Corp, Royal Dutch Shell Plc and Malaysia's Petronas have yet to begin construction.

Kruger said Imperial and Exxon, which has a 69.6 percent stake in the Canadian company, are laying the groundwork for the LNG project. The two are firming up the size of their available natural gas resources, finding customers, looking at transportation options and waiting for clear fiscal and regulatory rules that will govern the project.

"If you are waiting to wake up one morning with a major announcement, these projects are not like that," he said.

Imperial's project, known as WCC LNG, is expected to produce as much as 30 million tonnes of liquefied gas per year. Canadian regulators approved a 25-year export license for the facility in December. (Reporting by Scott Haggett; Editing by Lisa Shumaker)