The LNG Canada liquefied natural gas project is on track for a final investment decision (FID) later this year, an official for the province of British Columbia said on Thursday.
The British Columbia-based project led by Anglo-Dutch Royal Dutch Shell in partnership with PetroChina ,South Korea’s KOGAS and Japan’s Mitsubishi Corp has an estimated development cost of C$40 billion.
A FID was expected in late 2016, but was delayed due to falling oil and gas prices between 2014 and 2016, which forced energy companies to slash costs and delay or cancel new projects.
With oil and gas prices recovering significantly since then, energy companies are looking to spend more on future production.
“Shell seems to be targeting FID in the fall (of 2018). That would be very welcome since the first of such projects is always the hardest,” said Michael Nicholas, Managing Director, International Trade and Investment Office for British Columbia in Singapore.
Shell spokesperson was not immediately available for comment.
LNG Canada will initially have two LNG processing units,with a capacity to produce 6.5 million tonnes each per year.
Shell had reached agreements with a majority of local residents, including the indigenous communities of the First Nations, Nicholas said.
There was progress at the much-smaller Woodfibre LNG project, developed by Singapore-based Pacific Oil and Gas, Nicholas told Reuters.
The Vancouver-based facility plans to export 2.1 million tonnes of LNG a year, with development costs expected to touch around C$1.6 billion.
Backed by Pacific Oil & Gas and its private Singapore-based parent RGE Group, Woodfibre LNG is an often overlooked front-runner in the race to build Canada’s first LNG export terminal.
RGE Group is owned by Indonesian businessman Sukanto Tanoto.
“Their Woodfibre project continues to progress and will take less time to develop through to production,” said Nicholas.
China’s Guangzhou Gas is a key potential LNG taker, having agreed to buy 1 million tonnes annually for 25 years.