Prime Minister Justin Trudeau leads launch of biggest private investment in Canadian history with C$40B LNG project

Prime Minister Justin Trudeau welcomed on Tuesday the launch of LNG Canada’s $40 billion liquified natural gas project in British Columbia, the biggest private investment in the country’s history, saying the country does not have to “choose” between the environment and the economy in developing its natural resources.

The partners in the project are energy giant the Royal Dutch Shell Group, Mitsubishi Corp of Japan, Malaysian-owned Petronas, PetroChina Co and Korea Gas Corp. 

“This is the single largest private sector investment in the history of Canada,” Trudeau said in a speech that launches the project. 

Every company in the venture will be responsible to provide its own natural gas supply and individually market its share of liquefied gas. The first liquefied natural gas from the project is expected before the middle of the next decade.

The gas will be exported to markets in Asia, China in particular, where a state-mandated switch from coal to gas is underway. Beijing is shifting to gas because many Chinese cities are choking under a pall of coal-created smog, jeopardizing the health of millions of Chinese.

LNG prices rose last winter and have hovered near their highest levels in four years. 

A crunch is coming in the LNG markets because not enough projects are coming on stream in the years ahead.

“If you look at the demand curve and the supply coming on stream, there are simply not enough projects that are being sanctioned or under development to meet demand by 2023-24,” Shell’s chief financial officer, Jessica Uhl, told reporters on Tuesday.

The International Energy Agency has said that LNG demand is expected to hit 360 mtpa (million tonnes per annum) by 2023, compared to the 290 million mtpa traded in 2017. 

READ: Analyst Keith Schaefer provides an update on LNG in Canada

The US Energy Information Administration said Asian countries led the growth in global LNG imports, accounting for 74% (2.6 billion cubic feet/day) of the increase in 2017. Japan is still the largest importer of LNG, but China is now the world’s second-largest importer of LNG in 2017, followed by South Korea.

Companies from the three countries are partners in the Canadian LNG project.

LNG Canada CEO Andy Calitz paid tribute to the support given by both the national and state governments, and especially the local First Nations and the Kitimat community.

Trudeau said the project stands to “benefit all Canadians”. The project would provide an employment for 10,000 people in its construction and up to 950 in full-time jobs, officials said.

Story by ProactiveInvestors