Canadian liquefied natural gas developers are in a heated competition to deliver what they say will be the cleanest LNG in the world.

While the developers of the Shell-led LNG Canada project currently under construction say the facility will have the lowest emissions intensity of any liquefaction site in the world, generating only 0.15 tonnes of carbon dioxide for every tonne of product, other developers say they can go even lower.

By comparison, the global average is around 0.33 tonnes of CO₂ per tonne of LNG produced, with best-in-class facilities emitting 0.22 tonnes.

Last month, Chevron, which is developing the proposed Kitimat LNG facility in British Columbia with partner Woodside, said the project would have emissions intensity of below 0.1 tonnes of CO₂ per tonne of LNG.

"We're proposing a project — we don't use this term loosely — (for) the world's cleanest LNG," Kitimat LNG manager Fred Eastwood said at the Canada Gas & LNG conference in Vancouver last month.

Emissions targets

It is not just the supermajors that are in the game to get emissions as low as possible.

The developer of the 2.1 million tpa Woodfibre LNG facility is targeting emissions intensity of 0.058.

"So we will be actually the lowest in terms of cleanest LNG in the world," Woodfibre LNG president David Keane tells Upstream.

A low-emissions threshold is mandated by the British Columbia government, which requires LNG projects to emit below 0.2 tonnes of carbon dioxide per tonne of product. However, developers in the province, where construction costs are higher than on the US Gulf Coast, are increasingly seeing the mandate as a competitive advantage.

"If you consider the huge global increase for liquefied natural gas as countries around the world turn to LNG to meet their climate and human health commitments, the need for BC-produced LNG, with the lowest overall emissions, is clear," says BC LNG Alliance chief executive Bryan Cox.

"Not only will BC projects have the potential to reduce global emissions by displacing coal, but also reduce global emissions if they displace LNG produced in other jurisdictions."

The recent history of LNG in Canada has been marked by uncertainty, as multiple projects have been deemed too costly and put on hold or shelved. But there is some optimism for the industry since the LNG Canada consortium took a final investment decision on the project in October.

Woodfibre LNG in Squamish, British Columbia is likely to be the next sanctioned project, with a final investment decision expected soon.

Brownfield development

The project, which is being developed by Singapore-based Pacific Oil & Gas, recently signed a binding LNG sales and purchase agreement with BP's marketing arm, under which the UK supermajor will receive 750,000 tonnes per annum of LNG over 15 years on a free on board basis, with first delivery expected in 2023.

The small-scale brownfield development situated on an old pulp mill site is expected to cost between C$1.6 billion and C$1.8 billion (US$1.2 billion to US$1.4 billion), a fraction of the LNG Canada development.

The project also involves the building of a 47-kilometre pipeline, compared to the 670-kilometre pipeline being built for the LNG Canada site.

"But at the end of the day, I think you can be cost competitive, even when you're building a 600-mile (960-kilometre) pipeline," says Keane, citing the roughly 10-day shipping time from Canada's west coast to Asian markets, as well as the low cost of supply of western Canadian gas, which trades at a discount to the US Henry Hub benchmark.

"There are a lot of reasons I think we can be cost-competitive going into Asian markets," he says.

The Woodfibre LNG project will use fully electric drives powered by BC Hydro, which will help keep emissions low. The facility is the first industrial project in Canada to be awarded an environmental certificate by an Indigenous government.

In November, the Squamish Nation approved the Woodfibre LNG project after carrying out an environmental assessment and suggesting changes to the facility's design, which the developers agreed to make.

Larger design

Chevron and Woodside, however, envisage a larger design for the proposed Kitimat LNG facility in British Columbia.

The US supermajor recently submitted changes that would expand the project from a two-train, 10 million tpa facility to up to three trains capable of delivering 18 million tpa.

The facility, like Woodfibre LNG, would us all-electric drives powered by utility BC Hydro. "With the use of BC Hydro to power all the facilities, our greenhouse gas footprint could be five to eight times lower than best in class," Eastwood told the Canada Gas & LNG conference.

Additionally, the Kitimat LNG partners may opt for a modularised design to fit on the compact project site.

"We've spent a lot of time drawing upon the work that Woodside has done in Australia, leveraging a lot of technologies that are employed, quite frankly, in the offshore industry, in terms of designing modules," he said.

However, there is still much work to be done before the partners can move ahead with the project.

Eastwood said the consortium still needs to finalise the cost structure and execution planning for the project and continue talks with First Nations.

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Canada makes its case for clean LNG