LNG Canada Makes Debut Delivery

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Liquefied natural gas (LNG) delivered from a facility in British Columbia will help ensure the economies of Asia are adequately supplied, Shell plc (London, England) said of the first shipment from LNG Canada (Kitimat, British Columbia).

"We expect that supplying LNG will be the biggest contribution Shell will make to the energy transition over the next decade, and projects like LNG Canada position our portfolio to achieve this," Cederic Cremers, the president of gas operations for Shell, said Tuesday.

Cremers said Shell, the largest of LNG Canada's stakeholders, expects the Asian economies to take up most of the gas from the facility, particularly as they shift away from coal for power generation. With few natural resources of its own, meanwhile, Japan is heavily dependent on imports to feed its power sector.

Each stakeholder is responsible for securing their respective gas supplies and offtake agreements. Shell did not indicate the destination for the cargo. Shell holds a 40% stake in LNG Canada, alongside Malaysia energy company Petronas and a handful of Chinese, Japanese and Korean businesses.

The debut shipment of LNG comes as Canada works to expand its trade options amid disputes with U.S. President Donald Trump over his economic policies. Reconfiguring a North American free-trade deal during his first term, Trump enacted tariffs on Canadian imports in one of his first acts of office.

Threats before Trump's term began upended Canadian politics, forcing long-time Prime Minister Justin Trudeau to resign. Leaders have since pressed for more trade options outside North America, with Canada signing a free-trade agreement with the European Union.

Exports from western shores are expanding too, with the Port of Vancouver reporting a 5% year-on-year increase in cargo. Elsewhere, Pembina Pipeline Corporation (Calgary, Alberta), along with the aboriginal Haisla Nation, is developing the Cedar LNG facility, a floating liquefied natural gas facility off the coast of British Columbia.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a report on the Cedar LNG project and click here for the LNG Canada project reports.

Last week, the Canadian Senate passed the One Canadian Economy Act, or Bill C-5, a measure that was introduced in response to U.S. tariffs to remove trade barriers and advance nation-building projects, including pipelines.

Prime Minister Mark Carney, a former central bank official, has said he recognized the need to build out more infrastructure. He also met recently with representatives of the metal and mineral sectors to discuss the best way to address U.S. tariffs after Trump increased import duties on steel and aluminum from Canada to 50%, from a 25% rate set in March.

Canada and the U.S. are continuing trade negotiations with a late-July deadline in mind. Canada during the weekend dropped a tax on U.S. technology firms so that talks could resume.

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