The Pacific NorthWest LNG project will consist of two LNG trains, each with a liquefaction capacity of of 6 million tonnes per annum, by the end of 2018 or 2019, said Arif Mahmood, vice president of corporate planning at Petronas, according to a Reuters report.
“There is space to build a third train and capacity could go up to 18 million (tpa),” Mahmood told an industry conference, referring to potential expansion at the site.
About $5 billion of the planned costs would go towards a pipeline project to be built by TransCanada that would supply gas to the two LNG trains on Lelu Island in the Port Edward district of the province, Mahmood said.
Much of the gas would be sourced from the Montney shale play in northern British Columbia. Petronas bought out its Montney joint venture partner, Progress Energy, in a high-profile, $5.2 billion takeover last year (excluding debt).
The liquefaction plant itself is expected to cost between $9 billion and $11 billion to construct, with the rest of the anticipated spending expected to go towards upstream development of gas reserves.
“No final investment decision has been made and we don’t expect one before late 2014,” Pacific Northwest LNG spokesman Spencer Sproule told Dow Jones.
Petronas has secured its first LNG buyer for the project, selling a 10% stake to Japan Petroleum Exploration. The Kuala Lumpur-based company is reportedly in talks with more buyers to sell further stakes in the project.
“What we’re looking for is actually potential partners where they will also be offtakers of the gas,” Reuters quoted Mahmood as saying.
He added that Petronas will own at least 50% of the project.
Pacific NorthWest LNG is one of 12 LNG terminals under consideration for Canada’s west coast. None have been formally approved by their sponsors.
LNG operators have their sights set on markets in Asia, where the fuel can fetch far higher prices than in North America, where gas production is soaring.