By Amanda Stephenson
CALGARY (Reuters) -Canada said on Thursday it will add the proposed Ksi Lisims LNG facility to its major projects list for fast-tracking, a designation the company behind the project said makes it more likely to proceed.
Prime Minister Mark Carney made the announcement in Prince Rupert, British Columbia, where the facility would be located with direct shipping access to Asia. Ksi Lisims has a planned capacity of 12 million metric tons per year, which would make it Canada’s second-largest liquefied natural gas export terminal after Shell-led LNG Canada, which began operations this year.
Carney is aiming to speed up natural resource project construction to boost the economy that has been damaged by U.S. tariffs.
The government created this year a major projects office tasked with streamlining approvals and helping to coordinate financing for large-scale infrastructure projects deemed in the national interest.
INVESTMENT DECISION EXPECTED NEXT YEAR
The proponents of Ksi Lisims — Houston-based Western LNG; a consortium of Canadian natural gas producers called Rockies LNG; and the Nisga’a First Nation, who own the land for the project — have not made a final investment decision to proceed.
But Western LNG CEO Davis Thames told Reuters inclusion on Canada’s major projects list brings Ksi Lisims closer to fruition, adding the proponents expect to decide whether to proceed early next year.
“It’s pretty obvious that the different constituents of the project will see this (designation) as being favorable,” Thames said, adding expedited permitting times would decrease the likelihood of construction delays once Ksi Lisims is under way.
“Time is money, and when you have to stop construction because you didn’t get a permit in time, that’s what just kills budgets,” he said.
Shell and TotalEnergies have signed 20-year LNG purchase agreements with Ksi Lisims. The company is working to finalize other commercial agreements with LNG purchasers before committing to a final investment decision, Thames said.
Construction is already under way on the 900-km (560-mile) Prince Rupert Gas Transmission pipeline, which will transport natural gas from northeast B.C. to Ksi Lisims and was also on the government’s list.
Canada’s major projects office has also been tasked with collaborating with affected Indigenous groups to help fast-track infrastructure development.
Having the backing of the major projects office increases the odds of the project going ahead, but is not a guarantee that a positive final investment decision will be reached, said RBN Energy analyst Martin King.
“Locking up the needed financing is also something that needs to be finalized,” King said.
Carney’s government said fast-tracking the latest round of projects will spur private investment worth C$56 billion ($39.93 billion). Other projects announced on Thursday for inclusion on the fast-track list include the North Coast Transmission line – an estimated C$6 billion electrification project by BC Hydro that is expected to provide clean energy to the province’s LNG and mining industries – and the Crawford Nickel project, an open-pit nickel and cobalt mine in Ontario by Canada Nickel Company.
($1 = 1.4024 Canadian dollars)
(Reporting by Amanda Stephenson in Calgary; Additional reporting by Divya Rajagopal in Toronto and David Ljunggren in OttawaEditing by Rod Nickel)
