BG Group has entered the regulatory phase of its Prince Rupert LNG project, submitting applications to Canadian and British Columbia environmental review agencies for a three-train operation aimed at eventually exporting 21 million mt/year, the company confirmed Thursday.
Construction of the first phase of two trains is scheduled to start in 2016, with completion in the final quarter of 2020 and first shipments in 2021, while timing of the second phase with one train will depend on market conditions, BG said in its project description in a recent regulatory filing.
The project is expected to cost US$11 million for the first phase and $5 billion for the second, the company confirmed separately.
BG is considering partnership options to "help mitigate development and financial risk," but is not ready to disclose more details at this point, BG spokesman David Byford said in an email Thursday.
The first two trains would require 189 LNG carriers a year and the second phase another 95 vessel visits, with the carriers ranging from 138,000-210,000 cubic meters in capacity.
The scope of the project points to eventual natural gas consumption for the three trains of 3.3 Bcf/d, matching British Columbia's current gas production.
An estimated 800 MW of power would be needed to run the facility, which BG said it would prefer to obtain from government-owned BC Hydro rather than site-generated electrical power.
Based on its own forecasts of a 50% rise in global LNG demand to 280 million mt/year by 2015, BG said Japan and Korea remain the traditional markets, with high growth expected in China and India.
Byford said BG will not discuss the status of commercial arrangements beyond those comments.
The company said British Columbia is "well positioned to compete in the international LNG market" because of its "substantial reserves of natural gas" while export facilities located on the north coast of British Columbia are well located to ship LNG to Asia.
BG joins three other major LNG projects -- Chevron-operated Kitimat LNG, Shell-operated LNG Canada and Pacific NorthWest operated by Progress Energy Canada, a subsidiary of Petronas.
Those three are pursuing initial LNG shipments in 2018-2019, with eventual capacity of a combined 46 million mt/year.
BG said that starting in October 2011 it has made contact with six of seven aboriginal groups potentially affected by the project and stepped up the consultations once it completed preliminary feasibility studies last year. It has also opened discussions with all other interested and affected stakeholders.
The regional First Nations have already raised concerns over a possibility of using natural gas-fired power rather than hydro-generated electricity. Art Sterritt, executive director of Coastal First Nations, representing eight regional aboriginal communities, said BG is "going to have a wake-up call" if it pursues that course.
He said fossil fuel power plants would produce four times more carbon dioxide than emissions from British Columbia's current gas production and "we don't think British Columbians will buy that."
But Sterritt said First Nations support the LNG sector and will work with the associated companies to find cleaner environmental solutions.
