Anglo Dutch energy giant Shell is pushing forward the development of a major liquefied natural gas project in Canada's British Columbia, even though construction of the first phase is behind the schedule - in part due to impact from Covid-19 pandemic.

At least three industry officials said that Shell and the lead contractor partnership of US engineering contractor Fluor and Japan’s engineering house JGC have started talks to build LNG modules for the project’s second phase with the yards that are consructing LNG Canada's phase one modules.

“Fluor-JGC consortium will make the award through bilateral negotiations with yards which are building LNG modules for the project’s first phase, instead of through a tender process,” said one source with direct knowledge of the matter.

Like phase one, the second phase involves the construction of two trains – Train 3 and Train 4 - each with similar size as the 7 million tonnes phase one trains.

Sources said that the award could be made in the second half of 2021.

Last year, the Fluor-JGC consortium made two separate awards to Offshore Oil Engineering Company (COOEC) and COOEC-Fluor Heavy Industry, a 50:50 joint venture between Fluor and COOEC to build modules for LNG Canada’s first phase.

The modules weighing about 250,000 tonnes are scheduled for delivery in late 2022, with the first LNG volumes expected in 2025, according to sources.

COOEC’s workscope involves 18 process modules carrying a total steel weight of up to 150,000 tonnes, while COOEC-Fluor is contracted to build modules covering the so-called outside battery limits (OSBL) workscope involving modules for public utilities, facilities and equipment necessary to support the LNG plant.

The modules for LNG Canada are classified in three packages covering processing, pipe rack and electrics and utilities, plus one inlet facilities integrated module.

There are up to 18 process modules weighing 100,000 tonnes and 12 pipe rack modules weighing 40,000 tonnes.

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

In September, Fluor said the construction schedule for LNG Canada project had been delayed due to the Covid-19 pandemic 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 the site workforce was reduced by half in March as a precaution against the spread of the coronavirus.

In November, LNG Canada said that a coronavirus cluster had emerged at the LNG Canada site in Kitimat, western Canada, with at least 41 people testing positive.

LNG

Shell moves into second phase of LNG Canada project in British Columbia