Shell buys terminal in Kitimat as it looks to export LNG

With KM LNG and the BC LNG Co-operative already on the path to locating LNG plants in Kitimat, Shell Canada has added its name to the list.

With KM LNG and the BC LNG Co-operative already on the path to locating LNG plants in Kitimat, Shell Canada has now officially added its name to the list.

Cenovus announced last Thursday that it had sold the old Methanex site to Shell.

Back in 2005 Cenovus entered into a five-year agreement with Methanex under which Methanex handled the condensate being imported by Cenovus through the closed methanol plant’s terminal.

Under that agreement Cenovus had first right of refusal if Methanex decided to sell the site within that five year period.

And after that five years, assuming no other buyer had come along, Cenovus would have to buy it from Methanex.

Cenovus did that in November of last year, but when delivering its first quarter results for 2011 stated it planned to sell the site (Northern Sentinel, March 23).

Explaining the sale, Cenovus spokesman Rhona DelFrari told the Sentinel, “terminal service is not part of Cenovus’ core business, we are in the oil and gas industry.”

Therefore it had never been the company’s intention to keep the property.

“So, over the last few months we have been speaking with various parties about the potential sale.”

DelFrari added Cenovus believed the sale was in the best interests not just of its shareholders, but also the community of Kitimat.

As for what happens with the importing of condensate, she said the amount going through Kitimat’s terminal represented about 20 per cent of the company’s needs.

And that would continue for “the foreseeable future”.

However, she added, “Possibly, at some point in the future when Shell makes a decision about the future of that terminal, then we may have to look elsewhere for our diluent.”

But since Cenovus had signed the original deal with Methanex, “many more sources of diluent have opened up in North America so we’re confident we will be able to find diluent elsewhere.”.

As for how much Shell has paid for the site, DelFrari said that under a confidentiality agreement it could not be released.Cenovus bought the site from Methanex for about $37 million.

Shell spokesman Stephen Doolan also declined to reveal the purchase price.

“It’s in the early stages so we can’t really get into details on the cost side,” he said in an interview.

As for whether Shell intended to locate an LNG plant on the site, he would only say that Shell and its joint venture partners were “exploring the potential”.

He said those partners are Korea Gas, Mitsubishi of Japan and the China National Petroleum Company.

“Getting the location is part of the early stages of exploring the project,” Doolan repeated.

Not surprisingly, mayor Joanne Monaghan was upbeat about the announcement.

“I was really pleased,” she said.

“This is good news for Kitimat.”

That said, it would probably take two years for Shell to go through the regulatory processes.

Just Posted

Gitga’at First Nation student receives national award

Spencer Greening’s thesis is based on Indigenous expressions of history

Heart of Our City: Julie Enman shares tools of empowerment

Coast Mountain College instructor teaches carpentry and confidence in Prince Rupert and abroad

Intertidal Music Festival back for round two

More than 20 performances throughout the day at the North Pacific Cannery on July 21

MVP of the Week: “Forge”ing a soccer future in Prince Rupert

Men’s soccer coach wants to see soccer grow in Prince Rupert

From the English Channel to the BC Summer Games

Amber Ly is taking her experience aboard the tall ship Royalist with to Cowichan July 19-22

Rushbrook Trail officially open

A ribbon cutting ceremony was held on July 14 to officially unveil the new trail to the public

Newspaper carriers wanted!

Contact The Northern View today to find out how you can become a part of our team

Air quality statement warns of smoky air for Kamloops area

Environment ministry says area on north side of Thompson River may be affected by wildfire smoke

Pussy Riot claims on-field protest at World Cup final

Russian protest group claimed responsibility after four people ran onto field in police uniforms

Fans party on Montreal streets after French World Cup win

To city is home to nearly 57,000 French nationals

B.C. VIEWS: Making private health care illegal again

Adrian Dix battles to maintain Cuba-style medical monopoly

Almost every part of Canada’s largest national park deteriorating: federal study

Drawing on decades of research — the report lists 50 pages of citations

Activists protest outside Kinder Morgan terminal in kayaks, canoes

Tsleil-Waututh elder Ta’ah Amy George led the water ceremony from a traditional Coast Salish canoe

Canadian soccer fans brace for World Cup final between France, Croatia

First ever final for the Croatians, while it’s France’s third, going into match as betting favourite

Most Read