Canada Green Lights Export License for Shell-led LNG Canada


Published: Feb 04, 2013

By Chip Cummins

Canada's top energy regulator, the National Energy Board, said Monday it had approved an application by LNG Canada Development Inc. for a license to export liquefied natural gas from a proposed facility on Canada's West Coast.

LNG Canada, a consortium led by Royal Dutch Shell PLC, (RDSB) is the second group to win a license from the Canadian government. Shell's partners in the project include PetroChina Co., Korea Gas Corp. and Japan's Mitsubishi Corp.

A second group, Kitimat LNG, led by Apache Corp. (APA) and Chevron Corp., (CVX) received approval in Canada for its own license in late 2011. That license was the first issued by Canada allowing for LNG exports.

Last July, Shell applied to the NEB for a license to export up to 24 million tonnes of LNG per year, for a term of 25 years. Shell doesn't expect to start exporting any gas until 2019.

As part of the project, Shell plans to build a pipeline that will connect gas fields in northern British Columbia to an export facility near Kitimat, B.C.

Several other groups--including Malaysia's Petroliam Nasional Bhd. and its recent Canadian acquisition, Progress Energy Resources Corp.--are also drawing up plans for export terminals on Canada's West Coast. At the same time, energy companies are planning exports facilities in the U.S., both along the U.S. West Coast and the U.S. Gulf Coast.

Just a few years ago, energy giants were contemplating building vast and expensive terminals to import LNG, super-chilled gas that can be shipped in tankers. But a raft of new drilling technology opened up vast new gas reserves across North America, sending prices falling. Amid a glut of gas, energy companies have scrambled for ways to open up new markets in Asia, where gas prices are much higher.

-Write to Chip Cummins at [email protected]