LNG Canada CEO Says Tariff Question No Longer an Issue

The head of LNG Canada, which is proposing a $40bn liquefaction project on Canada's west coast at Kitimat, BC, says a countervailing tariff against imported steel components used in module fabrication "is no longer a question that concerns" the supporting partners of the project.

Speaking on the sidelines of the Canada Gas & LNG Conference in Vancouver May 15, LNG Canada CEO Andy Calitz said that the partnership's selection of an EPC team earlier this month brought clarity to the issue of where the massive modules for the liquefaction terminal will be built. With that clarity, LNG Canada's partners - Anglo-Dutch major Shell, PetroChina, Kogas and Mitsubishi - no longer consider the threat of a 45.8% anti-dumping duty against fabricated industrial steel components an issue.

"Taking into account all that we now know, I can say that the issue of countervailing duties being applied to LNG Canada is no longer a concern that will factor into our partners making their final investment decision," Calitz said.

The anti-dumping duty was directed at imported steel components sourced in China, South Korea and Spain. With the selection of Japan's JGC and US-based Fluor as EPC contractors, there appears now to be clarity that LNG Canada's modules won't be subject to the tariff.

In an earlier panel discussion, Calitz admitted that the decision in 2016 by Shell and its joint venture participants to delay FID on the 13mn metric tons/year LNG Canada project due to slumping oil prices and an uncertain LNG supply and demand outlook "was probably one of the most difficult days of my whole energy career."

But when the question of "when will you reconsider FID?" inevitably arose, Calitz said his answer then was that construction would be underway in 2018. "I reaffirm that commitment today," he told his Vancouver audience.