The prospects for a massive gas export plant on Canada’s Pacific Coast are looking bright, according to executives of service companies that would have a hand in supporting the facility.
LNG Canada, the Royal Dutch Shell Plc-led group that’s considering building a C$40 billion liquefied natural gas facility in British Columbia, is giving every indication that it’s planning to approve the project, the executives said at a panel in Calgary on Wednesday.
A flurry of activity this year in the remote Pacific town of Kitimat, where the facility would be located, has raised optimism that the project will be built, giving Canada a long-sought way to export its energy products to Asia.
Those hopes got a further boost in May, when Malaysia’s Petroliam Nasional Bhd took a 25 percent stake in the project, joining Shell and subsidiaries of PetroChina Co., Mitsubishi Corp. and Korea Gas Corp. in the venture.
“All the actions that they’re doing, including Petronas buying into the plant, and the cap contracts and everything else that they’re doing, really indicate they’re very close,” said Dale Dusterhoft, chief executive officer of Trican Well Service Ltd. “They’re just going through the list and ticking all the boxes.”
Dusterhoft said his company would likely see increased demand for its pressure-pumping rigs if the project was built and drillers needed to increase production to supply the facility. He added that he didn’t have any inside knowledge of Shell’s thinking on the project.
Those sentiments were echoed by Horizon North Logistics Inc. Chief Financial Officer Scott Matson, whose company owns land near the site and could build the camps to house the workers building and later operating the plant.
The feeling is different than the anticipation that Petronas would build an LNG plant on the coast, a hope that died a year ago when the company pulled the plug on the proposed $27 billion project. Petronas’s investment in the Shell project was the biggest move toward reviving that optimism, Matson said.
“If you think back three, four years ago when we all had LNG euphoria, that there was a slew of projects ahead of us, we certainly didn’t see any boxes being ticked to the same degree that they are today,” Matson said.
“Our view internally is that the flag in the ground was Petronas buying in. We have a hard time believing they would spend an ounce of time, energy or a dollar unless they had a clean line of sight to the project moving ahead.”
© 2018 Bloomberg L.P