Ksi Lisims LNG, an energy project proposed for Northern British Columbia, has signed Shell Eastern Trading Pte Ltd. as its first purchaser of liquefied natural gas.
Shell Eastern disclosed the 20-year deal in a joint announcement Monday with Ksi Lisims, which is undergoing a regulatory review of its plans to export LNG to Asia.
The goal is to start exports in 2028, with the operations expected to run for at least 30 years in what would be one of the largest such projects in Canada.
Ksi Lisims plans to use two floating platforms to produce LNG with electricity.
“We are pleased to sign this agreement with Ksi Lisims LNG which will help Shell to continue providing diverse and flexible LNG supply to its customers,” said Steve Hill, the Singapore-based executive vice-president of Shell Energy, in a statement.
London-based Shell PLC SHEL-N is the parent company of both Shell Eastern and Shell Energy.
The Nisga’a Nation, Western LNG and a group of natural gas producers called Rockies LNG are partners in the Ksi Lisims project near Gitlaxt’aamiks, which is home to the Nisga’a Lisims government, led by elected president Eva Clayton.
“As the project continues to pick up momentum, evidenced by this agreement with Shell, the Nisga’a people are now able to envision the opportunity and prosperity that Ksi Lisims LNG will bring to our nation,” Ms. Clayton said in a news release.
Shell Eastern has agreed to purchase two million tonnes of LNG annually from Ksi Lisims, one-sixth of its planned production. Western president Davis Thames said he is looking forward to working with Shell and signing up other customers.
Rockies president Charlotte Raggett said Ksi Lisims will be an important supplier of LNG during the global energy transition.
Members of the Calgary-based group of natural gas producers include Birchcliff Energy Ltd. BIR-T, Tourmaline Oil Corp. TOU-T, Advantage Oil & Gas Ltd. AAV-T, Peyto Exploration & Development Corp. PEY-T, NuVista Energy Ltd. NVA-T, Paramount Resources Ltd. POU-T, Ovintiv Inc. OVV-T and Crescent Point Energy Corp. CPG-T.
However, the elected Lax Kw’alaams Band government opposes the Ksi Lisims project, casting doubt on its promised goal of net-zero emissions.
And Gitanyow hereditary chiefs have expressed climate concerns about both Ksi Lisims and the project’s preferred pipeline partner, TC Energy Corp.’s Prince Rupert Gas Transmission. Natural gas would be transported from northeast B.C. to a site at Wil Milit on Pearse Island on the West Coast.
A portion of the contentious pipeline route would cross the Gitxsan Nation’s unceded traditional territory.
Ksi Lisims estimates the capital cost of its export facilities at $9.9-billion, assuming it is able to obtain sufficient supplies of hydroelectricity from BC Hydro.
BC Hydro is proposing a North Coast transmission project, in collaboration with First Nations, that would run along the existing route of its B.C. line between Prince George and Terrace. Assuming that twinning project eventually gets built, but not in time for the start of LNG exports from Pearse Island, Ksi Lisims estimates its capital costs would be $11.8-billion, including the additional expenses of temporary barges that would supply electricity generated by natural gas-fired turbines.
“Temporary power generation will allow the project to produce LNG and meet contractual LNG delivery obligations until the BC Hydro grid connection is complete and in operation,” Ksi Lisims said in an October filing to the BC Environmental Assessment Office.
K’uul Power, a non-profit corporation backed by key elected Indigenous leaders, has been created to foster collaboration between First Nations and BC Hydro.
Despite much hype a decade ago, about 20 proposals to ship natural gas in liquid form have been cancelled in B.C.
The first Canadian LNG exports aboard tankers could be shipped by 2025 by the Shell PLC-led LNG Canada project in Kitimat, B.C.
The initial export capacity of the LNG Canada joint venture has been set at 14 million tonnes a year, while Ksi Lisims plans to ship 12 million tonnes annually.
Ksi Lisims is among only a handful of remaining LNG prospects in the province. Others include Cedar LNG in Kitimat; Woodfibre LNG near Squamish; and FortisBC’s expansion plans at its domestic Tilbury LNG site in Delta.
Cedar, which is co-owned by the Haisla Nation and Pembina Pipeline Corp., said last week that it awarded a contract for engineering, procurement and construction of a floating production unit to Samsung Heavy Industries and Black & Veatch, subject to Cedar making a final investment decision by the end of March.
Coastal GasLink, a pipeline to be operated by TC Energy, will be transporting natural gas from northeast B.C. to Kitimat. A group of Wet’suwet’en Nation hereditary chiefs has led a campaign opposing Coastal GasLink, which completed the pipeline in October after five years of construction. More than 28 per cent of its route crosses the Wet’suwet’en’s unceded traditional territory.