Exxon seeks to export Canadian LNG

June 21, 2013 at 3:17 PM   |   0 comments

VICTORIA, British Columbia, June 21 (UPI) -- ExxonMobil is seeking permission to export 30 million metric tons of liquefied natural gas annually from British Columbia in what is considered the biggest export scheme ever proposed for Canada's West Coast.

The company is looking into potential construction sites for a proposed LNG plant in the Kitimat and Prince Rupert areas that would process the equivalent of almost a third of Canada's current daily production, the Financial Post reported.

In its export application with Canada's National Energy Board Wednesday, Exxon said the project at first would produce 10 million to 15 million tons of LNG a year, beginning from 2021 to 2023.

Gas would be drawn from fields owned by Exxon and its Canadian subsidiary, Imperial Oil Ltd.

British energy company BG Group also this week filed an application with the NEB, to export as much as 21.6 million tons of LNG per year from a proposed terminal on Ridley Island near Prince Rupert, British Columbia.

The two proposals come amid a worldwide LNG boom in which the International Energy Agency says global trade in the liquid fuel is expected to increase 31 percent by 2018 from 2012, as new supplies come online.

B.C. Premier Christy Clark welcomed the news of the two LNG export applications.

"Once again we see companies wanting to take advantage of B.C.'s LNG potential and this move today highlights industry's continued interest in its potential," Clark said Thursday in a statement.

"These applications, if approved by the National Energy Board, show that we are on the verge of new economic opportunities with LNG," said Rich Coleman, Minister of Natural Gas Development.

The NEB has issued export licenses to three similar Western Canadian LNG projects: LNG Canada (Shell and co-venture partners); Kitimat LNG (Chevron Corp. and Apache) and the Douglas Channel Energy partnership.

But none of those projects have reached final investment decisions to begin construction, The Wall Street Journal reported.

Brian Youngberg, an analyst who follows Exxon at Edward Jones & Co. in St. Louis, said it was not likely all the projects would be built.

"Right now it's a race to get buyer agreements and permits. With some of the others probably a bit further along in the process, Exxon is playing catch-up here," Youngberg was quoted as saying by the Vancouver Sun.

Exxon's application did not disclose the cost for the project.

"We're a fair ways away from an investment decision," Imperial Oil representative Pius Rolheiser was quoted as saying by the Vancouver Sun. "We'll make that decision after we get government regulatory approvals and determine contracts and relationships with customers and suppliers and a variety of other factors."

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