Canada approves LNG exports for Shell, partners from British Columbia


Canada's top energy regulator, the National Energy Board, said late Monday it had approved an application by LNG Canada Development Inc. for a license to export liquefied natural gas from a proposed facility on Canada's West Coast.

LNG Canada, a consortium led by Royal Dutch Shell, is the second group to win a license from the Canadian government. Shell's partners in the project include PetroChina, Korea Gas and Japan's Mitsubishi.

A second group, Kitimat LNG, led by Apache and Chevron, received approval in Canada for its own license in late 2011. That license was the first issued by Canada allowing for LNG exports.

Last July, Shell applied to the NEB for a license to export up to 24 million tpy of LNG, for a term of 25 years. Shell doesn't expect to start exporting any gas until 2019.

As part of the project, Shell plans to build a pipeline that will connect gas fields in northern British Columbia to an export facility near Kitimat, B.C.

Several other groups -- including Malaysia's Petronas and its recent Canadian acquisition, Progress Energy Resources Corp. -- are also drawing up plans for export terminals on Canada's West Coast. At the same time, energy companies are planning exports facilities in the US, both along the US West Coast and the US Gulf Coast.

Just a few years ago, energy giants were contemplating building vast and expensive terminals to import LNG, super-chilled gas that can be shipped in tankers.

But a raft of new drilling technology opened up vast new gas reserves across North America, sending prices falling. Amid a glut of gas, energy companies have scrambled for ways to open up new markets in Asia, where gas prices are much higher.

Dow Jones Newswires

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