LNG Canada allowed to push back export start date

LNG Canada allowed to push back export start dateImage courtesy of LNG Canada

Shell-led LNG Canada project has been granted an extension to the export commencement expiry date by the Canadian National Energy Board (NEB).

In its application filed in May, LNG Canada requested the export commencement expiry date be pushed back from December 31, 2022, to December 31, 2027.

LNG Canada stated that the requested extension constitutes a request to shift the timeframe over which exports would occur rather than a request for an extended license term and attendant increased term export volume relative to that approved by the license.

LNG Canada stated that it is requesting this extension in order to account for the market uncertainty affecting the timing of a final investment decision and the required timeframe for construction.

The five-year extension to the export commencement expiry date would permit LNG Canada to complete the project in a timeframe that aligns with natural gas market projections and reduces the likelihood that it will be necessary for LNG Canada to request further extensions from NEB.

The project has been granted a 40-year export license in January 2016, which was initially expected to start by December 31, 2022.

Shell holds a 50 percent stake in the C$40 billion ($31.8 billion) project, with other partners being PetroChina, Kogas and Mitsubishi Corporation.

The project participants last year delayed the FID as they looked to reduce the cost in response to low prices, and the decision is expected to be made in 2018.

Construction of its facility in Kitimat, British Columbia would be completed in two phases.

The first phase of the project will take approximately five years to complete the first two of four LNG trains with the capacity to produce 6.5 million tons of LNG per year each. The facility would later be expanded with the addition of two more trains, for a total estimated production capacity of 26 mtpa.

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