LNG Canada Project Mid-Year Update, Summer 2021

The LNG Canada project is now in its third year of construction, and the results are increasingly visible. “Going vertical” is a phrase that quite literally describes our activities in Kitimat this year.

Our progress in the first half of 2021 during the pandemic has been impressive. To make a project of this scale work well in such a challenging environment, many pieces must come together. We established new ways of working internally, with our prime contractor, JGC Fluor, as well as the Government of British Columbia, First Nations, and the local communities.

I want to offer LNG Canada’s sincere thanks to everyone supporting the Provincial Health effort in British Columbia. The COVID-19 measures in place to protect all British Columbians have made an important, positive and lasting impact on our construction progress this year.

While COVID-19 will likely continue to be a demanding issue that we manage across the organization, we remain committed to keeping our workers, the community, and the project safe and delivering our first LNG cargo by the middle of this decade.

What has 2021 looked like for us so far? Thanks to thousands of British Columbians and other Canadians working on our project, we’ve accomplished a great deal.

Following important site preparation work in Kitimat that included the safe installation of over 6,500 piles, we advanced construction work. In mid-June, we received our first main cryogenic heat exchanger and precoolers. This marked our first opportunity to receive critical infrastructure at our new material offloading facility, and to conduct our first heavy equipment transport along our new haul road to our main construction site. As well, we reached critical milestones at our global fabrication sites, as we prepare to receive modules required for our LNG facility.

Later this summer, we will raise a 1,600-tonne roof on our site’s large LNG tank, paving the way for inner tank work that will include three wall lifts and additional mechanical work.

We’re extremely proud to be making this progress with the help and support of the local community and First Nations who work alongside us each day. As of May 2021, LNG Canada and its contractors and subcontractors have awarded over $3.2 billion in contracts and procurement to business in British Columbia. Of this amount, over $2.6 billion has been awarded to local and First Nations-owned businesses. And more than 4,000 people were employed at our Kitimat site.

The Coastal GasLink (CGL) pipeline, which will deliver natural gas from northeastern B.C. to our LNG Canada facility, has also achieved some recent milestones. These include the completion of the Murray River crossing and the Kitimat meter station. Workforce numbers along the pipeline are increasing for the busy summer construction season. Learn more by reading CGL’s July 22 Construction Update.

Progress along the CGL pipeline is encouraging; however, we remain concerned that CGL’s operator and parent company, TC Energy, has proposed significant increased cost estimates to complete the pipeline, over and above what was agreed to when we took our final investment decision in late 2018. They have also said they will need more time to complete the work.

We have been working hard with TC Energy to understand the reasons for the increase in cost and schedule, and we have provided recommendations on improved execution efficiency and will continue to work with TC Energy and their partners to reach a commercial solution for how increased costs must be addressed in their original plans and how they can improve schedule performance.

While execution challenges exist with CGL that must be resolved, we are proud of the delivery at the plant site, and we have much to celebrate as we set our sights ahead to peak construction.

LNG Canada began with a bold vision: to work collaboratively with First Nations, local communities, non-governmental organizations, and local, provincial and federal levels of government and to set the benchmark for economically, environmentally and socially responsible LNG development in Canada. We are confident we are meeting that vision.

We thank you for your interest in our project, and for your support. We also thank the thousands of highly skilled Canadians who are building our world-leading, low-carbon LNG facility.

Stay safe,

Peter Zebedee