Pre-construction contract awarded for Kitimat project

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by Richard Gilbert last update:Oct 10, 2014

A joint venture between Fluor Corporation and JGC has been awarded a contract by Chevron Canada Limited for pre-construction work on the proposed Kitimat Liquefied Natural Gas (LNG) project on the northwest coast of British Columbia.

“These are all positive steps along the process of getting these projects up and running,” said Keith Sashaw, president and CEO of the Association of Consulting Engineering Companies - B.C.

“Our members are very interested in these LNG projects because we play a critical role in the early stages. They are supportive and watching with interest to see what is happening with LNG projects and resource development projects.”

Fluor announced earlier this month that the company is undertaking an engineering, procurement and construction contract for the Kitimat project.

It involves the completion of the existing front end engineering design (FEED) for the construction of an LNG facility near the port of Kitimat, about 650 kilometres north of Vancouver.

The FEED is divided into separate packages covering different portions of the project.

The scope of the project includes finalizing value-improving concepts, detailed engineering and procurement services for the initial phases of the project.

The Kitimat LNG project is a 50:50 joint venture between Chevron Canada and Apache Canada Limited.

It is still subject to a final investment decision.

Kitimat LNG is the flagship project for the B.C. Liberal party and their most important economic policy, the job creation plan.

The strategy, which was launched by Premier Christy Clark in September 2011, is focused on promoting the benefits of building a new LNG industry by 2020.

“Our LNG sector continues to show progress,” said Minister of Natural Gas Development, Rich Coleman.

“This contract represents jobs and economic activity, demonstrating the importance of continuing our efforts to develop B.C.’s LNG industry.”

Kitimat LNG was the first proposed project to be approved by the National Energy Board (NEB) in October 2011, which gives it the potential to become B.C.’s first LNG production and export terminal.

The proposed $4.5 billion project involves the construction and operation of an LNG terminal at Bish Cove, which will be built on First Nations land under a unique partnership with the Haisla First Nation.

Construction includes natural gas delivery, liquefaction, LNG storage and LNG send-out facilities, including marine off-loading.

Kitimat LNG purchased the former Eurocan industrial site in Kitimat, from West Fraser in July 2011.

The site provides the project with a suitable area for a work camp, lay-down and storage area.

The project also involves the construction of a 36-inch diameter natural gas pipeline, which will run about 463 kilometres from the Spectra Energy natural gas transmission system at Summit Lake, B.C. to the terminal facility.

Pacific Trail Pipeline Limited Partnership’s proposed $1.1 billion Pacific Trail Pipeline will also be built and operated by Apache Canada Ltd. and Chevron Canada Ltd.

The project has a licence to export up to 10 million tonnes of LNG per year to markets in the Asia Pacific region.

During the term of the 20 year licence, the quantity of LNG exported should not exceed 200 million tonnes.

Currently, the NEB has approved an LNG export licence for seven proposed projects in B.C.

Four proposed LNG projects in Prince Rupert and Kitimat, B.C. received separate 25-year export licences from the NEB on Dec. 16, 2013.

These export licences were for the following proposed projects: Prince Rupert LNG Exports Ltd., Pacific NorthWest LNG Ltd., WCC LNG Ltd. and Woodfibre LNG Export Pte.

LNG Canada Development Inc. received a 25 year export licence in February 2013, while BC LNG Export Co-operative was approved for 20 years in February 2012.

The Ministry of Natural Gas Development released some estimates for job creation on Dec. 30, 2013, which are based on the assumption that five plants will be in operation by 2021.

The report entitled LNG 101: A Guide to British Columbia’s Liquefied Natural Gas Sector made the following forecast:

21,600 jobs will be directly involved in the construction of LNG export facilities and associated pipelines;

41,900 jobs will be created in the industries that supply goods and services during the peak construction phase;

2,400 permanent jobs are required to operate and maintain the plants and pipelines on an ongoing basis; and

61,700 jobs are required to support LNG operations including workers required to drill, produce, process and transport the natural gas required to feed the export facilities.

last update:Oct 10, 2014

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