LNG Canada is ramping up construction at its Kitimat liquefied natural gas (LNG) terminal with the workforce expected to peak at 7,500 people next year, newly-minted CEO Jason Klein said at a news conference and tour of the site on Sept. 28.
With the first phase of the LNG project now 70 per cent complete and the Coastal GasLink (CGL) pipeline 75 per cent complete, Klein, who was appointed CEO in April, said there is plenty of reason to be optimistic despite pandemic setbacks and cost of the pipeline doubling.
鈥淭he pipeline has had almost a 100 per cent cost overrun,鈥� Klein said. 鈥淭hat鈥檚 not our experience here.
鈥淲e had contingencies to manage uncertainties鈥� Clearly the cost overrun on CGL was not welcome news. We now have a new agreement in place.鈥�
Klein showed off significant progress and LNG Canada construction manager Vince Kenny said the work is 鈥減retty much on track with where we want to be.鈥�
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Last time reporters were on site three years ago the company was about to commence concrete foundations, and worker accommodations were just being constructed. Now they are focused on 鈥渂uilding up,鈥� Klein said.
Once complete, the terminal for the liquefaction, storage, and loading of liquefied natural gas will export LNG produced by the project鈥檚 partners in the Montney Formation gas fields near Dawson Creek.
Without giving a date as to when the project will be complete and ready to start exporting natural gas, primarily to Asian markets, Klein said phase 1 is on track to be operational mid-decade.
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The company also wouldn鈥檛 give a start date for phase 2 of the project, which would double LNG production.
Klein said they don鈥檛 publish the budget and LNG Canada has neither confirmed nor denied estimated project costs of between $17 billion and $18 billion for the Kitimat terminal. The total budget for the LNG Canada project, including CGL and upstream assets, has been estimated at $40 billion, also unconfirmed by LNG.
The CEO pointed to $3.8 billion in contracts and procurement with B.C. companies, $3 billion of that awarded locally and with First Nations.
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During peak construction the number of projected LNG workers will rival the population of Kitimat 鈥� 8,236 people as of the 2021 census. Klein stressed that workers will not all be on site at the same time.
Klein said LNG Canada will try to limit impact of the influx of mostly 鈥榝ly-in鈥� workers to the community but won鈥檛 be taking any new steps to limit illicit drugs and criminality.
Workers are hired and background checks are conducted by LNG Canada鈥檚 contractors, but there are restrictions on what can be done in terms of background checks.
鈥淚t鈥檚 more of the same. I mean we鈥檒l keep doing what we鈥檝e been doing. Which has been pretty successful. Of course, there will be incidents and we鈥檒l address them when they happen,鈥� Klein said.
鈥淲e talk a lot about a respectful workplace.鈥�
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Part of that strategy is to keep workers mostly at the on-site Cedar Valley Lodge accommodations, which feature a resto-bar, convenience store, the only Starbucks in Kitimat, and activities ranging from mini-golf to a climbing wall and basketball court. Klein lauded leisure facilities and workout facilities which are 鈥減robably the best in this part of B.C.鈥�, saying they鈥檙e making it 鈥渞eally comfortable and welcoming for people to work here.鈥�
There are alcoholics and narcotics anonymous groups, men鈥檚 groups, women鈥檚 groups, religious groups and mental health counselors on site.
鈥淭here are K-9 searches, we, obviously, if there is any criminality, address that,鈥� Klein said.
鈥淢ore broadly we try to address mental health and addiction issues which is a problem across society. We try to address the underlying problem and then, of course, we鈥檙e very closely connected with the District of Kitimat and the RCMP if there are problems to address them.鈥�
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New workers go through Indigenous culture discussion and awareness sessions as a grounding before they even begin safety training, Klein said.
鈥淚t鈥檚 all about respecting Kitimat, respecting our community and respecting each other.鈥�
LNG Canada committed from the beginning to minimizing impact in the Kitimat and Terrace communities, Klein said. In particular around infrastructure. 鈥淭hat鈥檚 one of the reasons we have a facility here and the reason we have two health clinics here on site so we don鈥檛 put a burden on the healthcare system.鈥�
For much of the COVID period, Klein said people were not allowed to leave the camp but workers are now free to do as they please outside working hours, and spend money at local businesses.
鈥淭here is a portion of the community that is mainly focused on minimizing the impact on them and then there鈥檚 a portion of the community, the business owners, who are looking forward to the opportunity to make more revenue. And there鈥檚 a balance to be had there.鈥�
While the facility will increase emissions locally, Klein argued Canada鈥檚 relatively clean natural gas industry will offset global emissions and reduce reliance on coal in Asia amid more demand for American LNG in Europe.
鈥淥n net zero, our focus is on reducing the environmental impact here in Kitimat,鈥� he said, adding that First Nations have different priorities, ranging from employment to concerns about response to any potential spills of gas into the ocean.
鈥淲e鈥檝e tried to meet every First Nation where they want to be met and have a discussion about impact mitigation that鈥檚 meaningful to them and that鈥檚 an ongoing dialogue.鈥�
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