Shell and its partners have taken a final investment decision (FID) to build the $31bn LNG Canada export facility in Kitimat, British Columbia, Canada.
Initially consisting of two processing units, the LNG Canada facility is expected to have an export capacity of 14 million tonnes per annum (mtpa).
The Coastal GasLink pipeline, which will be built, owned and operated by TransCanada, will deliver upstream gas supply to the LNG Canada plant.
Royal Dutch Shell chief executive officer Ben van Beurden said: “We believe LNG Canada is the right project, in the right place, at the right time.
“Supplying natural gas over the coming decades will be critical as the world transitions to a lower carbon energy system. Global LNG demand is expected to double by 2035 compared with today, with much of this growth coming from Asia where gas displaces coal.”
The facility is expected to benefit from access to abundant, low-cost natural gas from British Columbia’s vast resources. It is also advantaged by relatively short shipping distance to North Asia, which is about 50% shorter than from the US Gulf of Mexico and avoids the Panama Canal.
The plant will be built on a large, partially-developed industrial site with existing deep-water port, roads, rail and power supplies.
With the FID in place, construction on LNG Canada is scheduled to begin immediately, with the first LNG expected before the middle of the next decade.
Canada Prime Minister Justin Trudeau said: “Today’s announcement by LNG Canada represents the single largest private sector investment project in Canadian history.
“It is a vote of confidence in a country that recognizes the need to develop our energy in way that takes the environment into account, and that works in meaningful partnership with Indigenous communities.”
JGC-Fluor has been awarded the project’s $14bn engineering, procurement, fabrication, and construction (EPC) contract.
LNG Canada is a joint venture consisting of Shell, PETRONAS, PetroChina, Mitsubishi and KOGAS. While Shell holds 40% stake in the joint venture, PETRONAS owns 25%. PetroChina and Mitsubishi own 15% each in the joint venture and the remaining stake is held by KOGAS.