LNG Canada will have the lowest greenhouse gas (GHG) intensity of any operating liquefaction plant in the world, CEO Jason Klein said, telling an industry audience they must better promote the environmental benefits of Canadian natural gas exports to get more projects off the ground.

Klein, a Shell plc executive who was tapped to replace Peter Zebedee last month, said construction of Canada’s first major liquefied natural gas (LNG) export project is 60% complete. A 10-storey natural gas inlet module that will take volumes off the Coastal GasLink (CGL) pipeline arrived in March, marking what LNG Canada said was the “next phase” of development.

Regulatory hurdles and the crucial need for cooperation with indigenous First Nations has created a challenging environment for LNG export projects in the country despite increasing global demand for the super-chilled fuel. LNG Canada is the only export facility under construction in Canada – even though 18 have been proposed. 

Klein said LNG Canada has benefited from the expertise of its joint venture partners, which include Shell plc (40%), Petronas (25%), PetroChina Co. Ltd. (15%), Mitsubishi Corp. (15%) and Korea Gas Corp. (5%). The project has also forged a deep relationship with the Haisla Nation, whose traditional territory is in Kitimat, British Columbia (BC), where the project is being built. 

“Those relationships, and the support in good times and in difficult times, are what have made our project succeed,” Klein told attendees of the Canada Gas & LNG Exhibition and Conference in Vancouver, BC.

The $17 billion project is the largest single private sector investment in Canada’s history. The costs balloon to $40 billion when upstream and midstream assets are included. The plant would have the capacity to produce 14 million metric tons/year of LNG from two trains. It could ultimately be expanded to four trains.

Kitimat was chosen for the facility because it’s near abundant BC natural gas supplies. The location also benefits from a shorter shipping distance to north Asia, one of the fastest growing gas markets in the world. The shipping route is 50% shorter than from the U.S. Gulf Coast and avoids the Panama Canal, according to Shell. 

Klein also pointed out that LNG Canada would have 35% less GHG emissions than any other currently operating LNG facility in the world. 

“In terms of decarbonization, I really think this is a place where Canada has a special role to play. The world needs more energy and it needs clean energy,” Klein said.

“LNG, specifically going into Asia, has a huge ability to reduce GHG emissions around the world by displacing coal,” he added. “And right now, around the world today, people are building new coal-fired plants in Asia, and this industry has the opportunity to displace that coal with natural gas.”

Both LNG Canada and the 2.1 Bcf/d CGL system that would serve it have long-term agreements in place with First Nations. Sixteen of the 20 tribes along the CGL took an ownership stake in the pipeline in a deal announced in March. The Haisla Nation is the majority-owner of the Cedar LNG floating liquefaction project that would also be located in Kitimat. 

Klein said not only have those sorts of arrangements marked an advance in economic reconciliation with the First Nations, but they also give projects in the region an advantage because of more stringent environmental considerations being made as they move forward. 

“We as an industry need to highlight our strengths,” Klein said. “You see such a consistent theme across these projects of reliable, responsible and low carbon. And if that’s the brand for LNG from Canada, then we will win because that’s what the world needs…We have to lead the charge on what we bring to the table.”