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Shell Looking at LNG Export from Western Canada

Royal Dutch Shell plc unit Shell Canada has signed on with a trio of Asian partners to explore developing a liquefied natural gas (LNG) export facility on the western coast of Canada, according to press reports. The group would be the fourth to target the region for LNG exports.

Shell is said to be in early talks with China National Petroleum Co., Korea Gas Corp. and Mitsubishi Corp., according to the Calgary Herald. "We need to secure a location, which we're still in the process of looking at," Shell spokesman Larry Lalonde told the paper.

He characterized the talks as being in early stages and said details were not available.

A Mitsubishi subsidiary is a partner with Calgary's Penn West Energy Trust in a 50-50 joint venture (JV) to develop gas properties in northeastern British Columbia (BC) (see Daily GPI, Aug. 25, 2010).

There are at least three other parties working on LNG export from Western Canada.

KM LNG, which is owned by Apache Canada, EOG Canada and Encana Corp., is the front runner to export LNG from BC. Its project calls for capacity of 1.4 Bcf/d. The terminal and allied pipelines already hold BC environmental and industrial development approvals, and aboriginal support and participation has been secured. The project schedule calls for deliveries to start within about four years from the first of two planned plant stages. Site clearing is under way (see Daily GPI, May 19).

Separately, BC LNG Export Co-operative LLC, a JV of the Haisla Nation and LNG Partners LLC of Houston (see Daily GPI, March 21), has reported generating a strong response with an initial call for participation in its Kitimat project (see Daily GPI, June 6).

Last month Calgary-based Progress Energy Resources Corp. agreed to sell a half interest in some Montney Shale properties in BC to Malaysia national oil company Petronas for C$1.07 billion. Opportunities to develop LNG export capacity from the province also are also being considered (see Daily GPI, June 3).

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