LNG project in B.C. to hire mainly Canadian workers for $40-billion terminal construction

Source: Terrace Standard

 
LNG Canada will hire primarily Canadian workers to build a planned terminal to export liquefied natural gas from Kitimat, B.C., newly released briefing notes for B.C.’s NDP minority government show.

The employment strategy is in sharp contrast to the abandoned plans by now-defunct rival Pacific NorthWest LNG, which would have use far more foreign workers for a site near Prince Rupert, according to the notes ministry officials prepared for Premier John Horgan and Energy Minister Michelle Mungall.

Royal Dutch Shell PLC and four co-owners of LNG Canada are expected to decide by the end of 2018 whether to forge ahead with the massive project in Kitimat.

Pacific NorthWest LNG, led by Malaysia’s state-owned Petronas, announced in July, 2017, that it had cancelled its plans to build an export terminal on Lelu Island in the Port of Prince Rupert. But Petronas disclosed in May, less than a year later, that it had signed a deal to become the second-largest partner in LNG Canada.

Before the cancellation of Pacific NorthWest LNG, Petronas estimated that foreign workers would account for almost 40 per cent of the 4,000 people required to build its terminal. At the peak of construction, the project would have had about 1,540 foreign workers and 2,460 Canadians.

During the final two years of the five-year construction, foreign workers would have accounted for 70 per cent of Pacific NorthWest LNG’s work force.

“PNW LNG proposed to employ temporary foreign workers [TFWs] for up to 70 per cent of its work force, while 95 per cent of LNG Canada’s work force will be comprised of Canadians,” said the briefing notes, which are in question-and-answer format.

The notes said LNG Canada envisages foreign staff accounting for 5 per cent of its construction work force of 4,500: “We expect LNG Canada to seek to bring this small percentage of TFWs to fill jobs for which unique skills are required.”

The B.C. government recently released the notes from March, 2018 – titled LNG Framework Q&A – in response to a freedom of information request.

LNG Canada and its prime contractor — the team of Japan’s JGC Corp. and Fluor Corp. of Texas — have a policy to hire from the Kitimat area first, and then within Canada, said Susannah Pierce, LNG Canada’s director of external relations. “The majority of the construction work force will be hired by JGC-Fluor, LNG Canada’s EPC [engineering, procurement and construction] contractor,” she said in a statement to The Globe and Mail.

LNG Canada estimates it will cost up to $40-billion to construct the B.C. terminal and complete infrastructure that includes TransCanada Corp.’s proposed $4.7-billion Coastal GasLink pipeline from northeastern British Columbia to Kitimat.

In March, the B.C. government unveiled new measures to spur LNG development, including sales-tax relief for construction and the elimination of income taxes that were specific to the industry.

The briefing notes criticize the Liberal government of Christy Clark for its attempts to bolster the LNG industry. No LNG project is under construction in the province.

“There is lots of work to do to make up for the backsliding and lost time, but we are up to the task,” the notes said.

While he was leader of the opposition, Mr. Horgan co-wrote a letter in 2016 to oppose Pacific NorthWest LNG, telling the Canadian Environmental Assessment Agency to beware of risks to salmon habitat near Lelu Island.

Mr. Horgan has embraced LNG Canada since becoming Premier in July, 2017, although B.C. Green Party Leader Andrew Weaver, whose party holds the balance of power in the legislature, opposes LNG exports from the West Coast.

“It is also worth noting that LNG Canada will produce fewer emissions, is based in a better location and has more support from First Nations” than Pacific NorthWest LNG, the briefing notes said.

In a section specifically for Mr. Horgan, the notes refer to the disagreement with Mr. Weaver over LNG exports and suggests an answer to potential questions about the Greens: “We are working together to solve problems and resolve our disagreements.”

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