Is Canada really handing $42 billion of work to China?

The CEOs of Shell Canada and Petronas Canada – the two major partners in the LNG Canada project – say the claim that the remission of steel tariffs for liquefied natural gas (LNG) projects will result in $42 billion of offshoring is simply not true.

While the LNG modules – also known as liquefaction trains – for the LNG Canada plant in Kitimat will be built in Asian steel yards, that only accounts for a portion of the $17 billion capital cost of the LNG plant in Kitimat.

“The majority of what the overall cost is will be spent in Canada,” said Susannah Pierce, director of corporate affairs for LNG Canada.

Shell Canada CEO Michael Crothers and Petronas Canada CEO Mark Fitzgerald said Canadian steel plants simply don’t have the capacity to build LNG modules on the scale required for a project like LNG Canada.

“We can’t be competitive as an LNG export nation unless we have access to the most effective assembly line for these massive modules. That kind of expertise to build modules of that scale doesn’t exist in Canada. But what we do have in Canada is the ability to put them all together.”

– Shell Canada CEO Michael Crothers