(Changes dateline to Vancouver, adds CEO quotes and project
By Julie Gordon
VANCOUVER, April 30 Royal Dutch Shell Plc's
proposed LNG Canada liquefied natural gas export plant
in British Columbia tiptoed closer to reality on Wednesday, with
the company signing a formalized partnership agreement with its
three Asian partners, nudging the project into the next stage of
Shell also boosted its stake in the project to 50 percent
from 40 percent, while PetroChina retains its 20
percent interest. Mitsubishi Corp and Kogas
will each take a 15 percent interest, down from their former 20
With the initial technical work complete, the partners said
they will now move ahead with the detailed engineering and
design work, along with an ongoing environmental assessment and
"It's important to note that today is not yet the final
investment decision to construct the project," LNG Canada chief
executive Andy Calitz told reporters. "We have a number of
uncertainties to overcome and work to do."
The final call on whether the project will go ahead is still
18 to 24 months away, he said. Construction would take about
five years, with operations expected early next decade.
The project, in the port town of Kitimat some 1,400
kilometers (870 miles) north of Vancouver, is just one of about
a dozen export terminals proposed for British Columbia's rugged
Pacific coast as energy firms scramble to build facilities to
move cheap Canadian gas to Asian markets.
Petronas' Pacific NorthWest LNG project and
Chevron Corp's Kitimat LNG project are considered
front-runners in the race to build Canada's first LNG export
terminal, with the LNG Canada project a close third.
With an initial capacity of some 12 million tonnes of LNG
per year, each partner will be responsible for sourcing its own
portion of the gas, in proportion to its ownership stake, and
will then take the same proportional amount of LNG produced.
"For every 100 cargoes that are produced, 15 will go to
Kogas, 15 will go to Mitsubishi, 20 will go to PetroChina and 50
will go to Shell," said Calitz. "As such, for this project, do
not expect LNG sales announcements."
(Additional writing by Scott Haggett; editing by Gunna Dickson)