The construction schedule for the massive LNG Canada project in British Columbia has been delayed due to the Covid-19 pandemic, contractor Fluor said, although the developer remains on target to deliver its first liquefied natural gas cargo in the middle of the decade.

Fluor chief executive Carlos Hernandez said on an investor call last week that the project was behind schedule after the site workforce was reduced by half in March as a precaution against Covid-19. However, he did not say how far behind schedule it was.


Energy explored: Gain valuable insight into the global oil and gas industry's energy transition from Accelerate, the new weekly newsletter from Upstream and Recharge. Sign up here.

"LNG Canada, it is behind because of the pandemic," Hernandez said, adding that Fluor, which is partnered with JGC on the project, was in discussions with LNG Canada about the timeline.

Hernandez was speaking on the same day that Fluor revealed it will no longer participate in competitive lump-sum bidding processes for its energy and chemicals business, saying they create too much risk for the company.

A spokesman for Fluor said he could specify any changes to the project timeline, but LNG Canada told Upstream it still expects to deliver its first cargo in the middle of this decade.

LNG Canada had previously projected a first cargo target of 2025.

Project 27% complete

Despite the challenges, Hernandez said progress was "progressing very well," adding that it was about 27% complete when factoring in engineering, procurement and fabrication.

"At this point, things are as well as they could be under the circumstances," Hernandez said.

The workforce at the Kitimat site has been ramping up and is now at "normal levels", with 2500 workers expected there by the end of the year, according to Fluor's investor presentation.

In addition, the fabrication management team has been working remotely to continue work on the liquefaction modules in China.

The team is expected to be mobilised in China by the end of the year, depending on government regulations, according to the presentation.

Upstream reported in May last year that module deliveries were scheduled to start in May of this year and run through to the end of 2021.

'Critical milestones' hit

An LNG Canada spokesman said the project continues to "hit critical milestones" despite impacts resulting from the pandemic.

"Major construction scopes are well underway and are continuing," the spokesman said.

"These include, but are not limited to advanced site preparation, pile driving and dredging, and construction of our module haul road and our marine terminal."

The LNG Canada consortium took a final investment decision in 2018 for the C$40 billion (US$30 billion) project.

The initial two-train development will have capacity for 14 million tonnes per annum of LNG and a further two trains could be added in subsequent development phases. First volumes are expected in 2025.

Shell operates LNG Canada with a 40% stake and is partnered by Petronas on 25%, PetroChina and Mitsubishi each on 15% and Kogas on 5%.

Fluor and partner JGC hold the engineering, procurement and construction contract on the project.