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REPORTING · 28th October 2014
Walter McFarlane
Council received an update from Kitimat LNG on Monday, October 6th. Mark Douglas and David Molinski put on a slideshow for Council.

“We wanted to talk first about the Apache announcement. We’re sure that’s something that’s really topical in your minds right now,” said Douglas. “As you are well aware, Apache announced in late July that it was planning to exit the project and also the Wheatstone LNG Project in Australia that we’re partners on. The Company has decided to go in a different direction to provide a different focus investor community and we wanted to clearly state categorically that Chevron is committed to this project and we will continue to move the project forward. We have publicly stated this.”

He explained the President of Chevron, John Watson, has let investors know they are committed to this project and when they have information on who the new partner is going to be, they will move forward.

Chevron would consider taking over the upstream work from Apache but all would depend on who they partnered with. Apache will be selling their share of the project and Chevron is not a part of the negotiations about who they could be selling it to. The two presenters told Council Apache is still doing the work on the site and the partnership agreement is still in good standing.

Councillor Mario Feldhoff pointed out there are other projects in the area which are still working on their permitting phase. He asked if they are courting other developers. He was reminded by Molinski that Chevron is not privy to what Apache is doing.

Douglas moved on to the work which they are doing locally. First of all, they are upgrading the forestry service road which leads to the site, investing significant resources. They are committed to reopening the road for public use in 2015. This is weather dependant. When they are ready to open the road, they are going to inform the community as to how it will work so they can see it in an orderly way.

The next topic was the work camp. Douglas told Council it opened in 2013 and they are still constructing it. Mayor Joanne Monaghan wanted to know how many people were in the construction camp. She was told there were 570 beds. However, the number of people depended on what time of the year it was, 250 – 300 on average.

At the site, they have completed the deep soil mixing. “That work has been completed now, and that has been an important piece of preparing the foundations at the site for the eventual construction of the plant and that work has been completed now. That has been an important part of taking the risk out of this project and understanding of how we’re going to construct the project and what it’s going to cost to build it,” said Douglas.

Council was told about Chevron’s offices. They have built a new office complex. They have a community office at the mall. They also have an office complex at the industrial site.

As for Clio Bay, Chevron plans to place 1.5 million cubic metres of marine clay at the bottom of the bay. It will restore Clio Bay and will give them a place where they can dump the clay. They are working with the Department of Fisheries to finalize their authorization, as well as constructing a trestle which will be used to load the barges. They plan to do the work in 2015.

On the topic of the Final Investment Decision, Douglas expressed he could not anticipate a date on a calendar when the Final Investment Decision would be made.

“We look at FID as when we have addressed a number of key risks on the project, then the company will make a decision to proceed with the project. We have five key elements that we will have to have completed,” said Douglas.

They need to finalize the upstream and the plant design and execution plan. They need to know how they are going to build it, how much it will cost and what the execution plan is. They are trying to take the risk out of the project. They need to be certain the work will be done on time and on budget. They will be looking at the total fiscal project, not just how much it will be taxed. They will look at the royalties and other fees and taxes.

First Nations support is critical to the project. They are building the project on Haisla Territory. They are building their pipeline across First Nations land and are working on a partnership. They need to have firm LNG sales agreements in place. There is also the need to understand who the new partner is. When these are all done, they will be able to proceed.
A trestle is being built to load the clay
A trestle is being built to load the clay
Work being done on the site
Work being done on the site
The road certainly looks upgraded
The road certainly looks upgraded
The road certainly looks upgraded
Comment by Connie Everitt on 4th November 2014
Yes they did such a good job maybe they should be hired to fix some of the roads and sidewalks in town and some places in the highway. ;)