Ivanhoe’s Kipushi zinc mine in the DRC officially reopens
The restart marked exactly a century since the mine first went into production.
The B.C. government will offer the gas industry $120 million in royalty credits to build the infrastructure needed to develop a liquefied natural gas industry.
Premier Christy Clark made the announcement Monday – the first day of a two-day LNG conference hosted by the province.
The funding comes under the Infrastructure Royalty Credit Program (IRCP), which was introduced in 2004. Under the program, companies involved in the LNG industry will be able to get royalty credits for the pipelines and roads they build – but only after the projects are completed.
It was just one of a number of announcements made Monday.
Two major players – Chevron Canada Ltd. (NYSE:CVX) and Apache Corp. (NYSE:APA) – used the conference to formally sign a revenue agreement with 15 First Nations along the corridor of the 463km Pacific Trail pipeline, which would be built to fuel the Kitimat LNG plant.
As part of that agreement, Clark also announced her government will loan those 15 First Nations – under the First Nations Group Ltd. Partnership – $32 million to help them participate in the project.
The federal government, meanwhile, announced the approval of an export licence for a $12 billion LNG project in Kitimat led by Shell Canada.
The 25-year licence granted to Shell will allow the company and its partners to export up to 24 million tonnes of LNG annually – about one-quarter of Japan’s annual LNG demand.
It is the third export licence to be granted but is by far the largest. The Shell project is widely considered to be the most advanced and most likely to be the first out of the gate in the race to sew up Asian LNG markets.
The global energy demand is expected to grow by 35% by 2035, Ottawa predicts, and much of that growing demand will be in Asia, which uses LNG for thermal power.
“Canada is well positioned to support that demand,” federal natural resources minister Joe Oliver said at a press conference Monday.
He added the Conference Board of Canada estimates the potential investment in the natural gas industry to be $180 billion between now and 2035.
“That’s an average of more than $7.5 billion each year, supporting up to 54,000 jobs,” Oliver said.
There are five LNG proposals and Oliver’s ministry estimates they could generate $1 trillion in economic activity over 30 years.
The likelihood of five LNG plants being built is remote, however, according to industry experts.
A panel representing the main players in B.C.’s nascent LNG industry – Shell, Chevron, BG Group, and Progress Energy Inc. (NYSE:PGN) – told the conference Monday that B.C. has tremendous promise, but also has some big hurdles. One of these is that the gas must be piped from the gas fields of northeastern B.C. to the coast, which will require hundreds of kilometres of pipeline to be built across two main mountain chains.
“My boss calls this a pipeline project, not an LNG project,” said Elizabeth Spomer, senior vice-president global business development, BG Group, which proposes an LNG plant for Prince Rupert.
Despite some of the technical challenges, she said the company – which already has LNG plants in Egypt and Trinidad and one in the works in Australia – feels B.C. will be a major player in LNG.
“We think B.C. is an important place for us to be,” she said.
See this week’s Business in Vancouver for more on LNG in B.C.
By Nelson Bennett, Business in Vancouver
