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Growing optimism surrounds Kitimat LNG project

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LNG Industry,

According to Bloomberg, increased activity in the remote Canadian town of Kitimat, British Columbia is raising optimism that Royal Dutch Shell Plc and its partners are ready to proceed with the nation’s largest infrastructure project: A US$30 billion LNG terminal.

The writing is on the wall. Sources describe a 49-unit apartment complex built to house Shell executives previously darkened for the last two years, now lit up and with SUVs parked outside. There are also signs that local workers are leaving jobs at the Rio Tinto Plc smelter nearby to join contractors recruiting for the LNG project. The housing market is showing indication of change as landlords have begun raising rents and houses are selling twice as fast as they used to.

“I would put money on it – it’s going ahead," stated Phil Germuth, mayor of Kitimat.

LNG Canada – comprised of Shell, Mitsubishi, Malaysia’s Petroliam Nasional Bhd., PetroChina Co., and Korea Gas Corp. – reportedly expects to make a final investment decision (FID) by the end of the year.

Backers of the project have already twice postponed the FID for this project in light of the global supply gut, however it would appear that tides are finally turning and outlooks are becoming more hopeful. Indeed, according to Energy Aspects Ltd, in the next 18 months US$150 billion worth of LNG ventures have a better-than-even chance of going ahead than they had in the recent past.

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