Shell Canada Ltd.’s president on Wednesday declared that management is “quite bullish” and “cautiously optimistic” about building the largest surviving proposal to start long-awaited liquefied natural gas (LNG) exports from the northern Pacific coast of British Columbia (BC).

The Shell-led consortium to build LNG Canada, in which it holds a 50% interest, includes affiliate partners of PetroChina Corp. (20%), Korea Gas Corp. (15%) and Mitsubishi Corp. (15%). The BC government has given LNG Canada until November to accept an incentives offer to build the terminal.

If it were to move forward, LNG Canada would carry up to 3.7 Bcf/d to overseas markets.

“We’re working toward making the project all the more affordable and competitive every day,” President Michael Crothers told a Calgary industry forum held by ARC Energy. “We’re doing everything we can to make this a success.”

Shell executives had been noncommittal about the BC project when questioned during the first quarter conference call, but last month JGC Corp. and Fluor Corp. were awarded engineering, procurement and contracting orders to design and build the project.

The BC government has sweetened the pot, giving LNG Canada until November to accept an incentives offer of C$6 billion ($4.8 billion) in provincial income, sales and carbon tax cuts to build the terminal.

However, Crothers said no promise could be made for a construction decision by the November deadline.

“The challenge we have is the cost of building in Kitimat,” a remote BC port in rain-soaked northern coastal forest far from industrial services and talent. With help by recently selected contractors Fluor and JGC, Crothers said, “We keep methodically working through the process.”

Initial estimates peg the cost of the Kitimat terminal alone at C$14 billion ($11 billion). Securing the LNG gas supply also requires shipper contract support for a multibillion-dollar TransCanada Corp. pipeline project, Coastal GasLink.

Royal Dutch Shell plc’s Canadian arm has to compete with other branches of the global conglomerate for the parent firm’s attention — and favorable taxes make operations in the United States formidable rivals, Crothers reported.

As chief of Shell Canada, “I need to wrestle with Texas to get some more cash,” said Crothers. “It’s not easy.”

On top of BC provincial incentives, LNG Canada is seeking federal exemptions from protective tariffs against imports of industrial hardware from Asia, where Shell’s project partners are based.

U.S. tax breaks not matched in Canada, such as a capital cost allowance enabling gas and oil producers to write off well expenses in a single year, affect Shell investment in even the richest BC and Alberta resources, Crothers indicated.

He said better Canadian tax rules would accelerate work on Alberta’s prolific Duvernay Shale, where 150 wells on 230,000 acres of Shell drilling rights have swiftly pumped up production to 50,000 boe/d.

“If we can get some help [from the government] we’ll invest more,” Crothers said.

He rated LNG Canada as, like the Duvernay, a “fantastic opportunity” if government policies let the project’s natural attractions prevail. The Kitimat export terminal would tap the even richer Montney formation and earn international environmental favor, Crothers said.

The LNG Canada plan boasts exceptionally low carbon emissions production because the Kitimat terminal would use zero-polluting power from provincial government-owned BC Hydro dams to refrigerate overseas tanker cargos, Crothers said.

The first BC entry into LNG exports is bound to be the most difficult to build but would establish a foothold for growth by adding lower-cost expansions, he noted.

LNG Canada holds a 40-year license from the National Energy Board for exports using processing and loading facilities to be built in stages paced to match markets. Crothers described the LNG outlook as encouraging, especially after overseas demand topped industry expectations by 30% last year.