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Black & Veatch and Samsung have given approval to proceed with the $4 billion Canadian LNG terminal

Vaseline 2 months ago

Developers took a major step this month to expand Canada’s liquefied natural gas export infrastructure. They notified Samsung Heavy Industries and Black & Veatch this month to complete engineering and design and begin construction of Cedar LNG, a floating gas export facility in Canada. Kitimat, BC, with a total estimated cost of $4 billion.

The facility, co-owned by Alberta-based Pembina Pipeline Corp. and the Haisla Nation, would be Canada’s second for LNG exports, its first as a floating operation and the country’s largest indigenously owned infrastructure project. The developers also say it has some of the most innovative emissions control technologies in the industry.

According to Pembina, Cedar LNG’s $2.3 billion floating production unit will be designed and built at a Samsung shipyard in South Korea under a lump-sum, fixed-price agreement, with $1.7 billion related to onshore infrastructure, ownership costs, commissioning, interest and costs. associated financial costs.

According to industry publication UpstreamSamsung and Black & Veatch are in negotiations to involve a Chinese shipyard in potential EPC services, with “at least six yards having been approached to gauge their interest in participating in a bidding process, due to close in October, with modules for development.” An award is expected in December, the publication said.

The owners also increased Cedar LNG’s expected capacity. The project was originally described as a 3 million tons per year facility, but the increase to 3.3 million tons per year “reflects technical optimization and a capital efficient option to improve the economics of the project,” Pembina said in a statement. will provide a valuable outlet for Western Canadian natural gas to access global markets.” The company previously focused on Asian markets.

According to the oil company, developing the floating facility “in the controlled conditions of a shipyard” would also provide “lower construction and operations risk.”

The owners postponed a previously announced final investment decision in January and the start of design and construction in the second quarter due to delays in natural gas supply negotiations, the settlement of third-party agreements and project financing, they said.

The project this month signed a 20-year agreement with Alberta gas drilling company Arc Industries to deliver approximately 200 million cu ft of natural gas per day once it becomes operational in the second half of 2028. our offtake agreement with ARC Resources,” said Haisla Nation Chief Councilor Crystal Smith, noting the supplier’s “responsible development commitments and values.”

Cedar LNG “will be the world’s first floating hydroelectric, turbo-powered system that is air-cooled using a single cryogenic mixed coolant process.” Laszlo von Lazar, Black & Veatch president of Energy and Process Industries, told ENR. This will eliminate the time-consuming recycling of water for cooling liquefaction systems, he said. The company’s PRICO technology also reduces refrigerant inventory and increases efficiency by up to 2.5%, Von Lazar said.

The LNG plant itself will be on the deck of the ship, with electricity supplied in Kitimat by an onshore power grid that Cedar LNG and utility BC Hydro are developing, said Brady Hays, senior vice president of energy resources and process industries at Black & Veatch. The company will have approximately 350 employees supporting the project, with detailed engineering and procurement expected to continue until the end of 2025.

“Right now we are designing the fabricated steel that will hold the modules and writing the specifications for sizing and procurement,” explains Von Lazar. “We will procure the steel and install the equipment while the modules are built successively at Samsung’s yard.”

About 20 modules will be built “for the treatment of the gas before it is liquefied and for the liquefaction unit itself,” Hays said.

Cedar LNG has received all major regulatory approvals and is negotiating an agreement to connect the facility to Coastal GasLink, the TC Energy-owned pipeline completed last year to transport gas to the nearby but independent export terminal of LNG Canada, led by Shell. The 14 million tonnes per year first phase of that onshore facility, which is being built under an EPC contract with JGC Corp. and Fluor Corp. Construction, is nearing completion, with the estimated $14 billion project on track to ship its first LNG next. year.

With the January pause in the U.S. government’s authorization of new LNG exports to countries without a U.S. free trade agreement, Canada’s export facilities worldwide could benefit from the U.S.-Mexico free trade agreement, according to a March report from the Institution for Energy Economics and Financial Analysis.

But the report warned that Canadian projects face an uncertain future due to declining global demand for LNG and potential oversupply. LNG will retain its importance “when renewable energy sources do not produce power,” von Lazar said. “LNG is connected to what is happening globally in renewables and facilitates decarbonization progress.”

Opposition to LNG is also growing in Canada, with 88 advocacy groups recently asking British Columbia Premier David Eby in a letter to halt expanded gas production, including five export terminals under construction or planned in the province. the Vancouver Sun recently reported. They cite “megatons of greenhouse gas emissions per year” and insufficient BC Hydro transmission capacity to support expanded electrification of the terminals.