A proposed liquefied natural gas export terminal near Prince Rupert is getting a major boost as Tourmaline Oil Corp. — Canada’s largest natural gas producer — agreed to join the project.
Tourmaline said late on Wednesday that it’s joining Rockies LNG, a group of producers working on the 12 million-tonne-a-year Ksi Lisims project at Wil Milit, north of Prince Rupert. Rockies LNG’s members produce a combined 1.7 billion cubic metres a day, about a third of Canada’s output. The Nisga’a Nation and Texas-based Western LNG also are involved.
Canadian gas drillers have often suffered from low prices because of constrained export options, and Tourmaline has been a leader in devising new routes to market its output. The company earlier this year began selling the first significant amount of Canadian gas contracted for markets beyond North America.
“We are the largest gas producer and a low-cost potential supplier, and we’re investment grade,” Tourmaline CEO Michael Rose said of his company’s contribution to the Ksi Lisims project, planned for the far northern end of Pearse Island on Portland Canal, during a call with analysts on Thursday. “We’re excited, and we’re going to do everything we can to drive that project to fruition.”
Canada’s Montney shale formation — stretching from Alberta into B.C. — is one of the largest gas resources in North America, with the potential to produce almost 12.75 trillion cubic metres of gas. Tourmaline produced the equivalent of about 495,900 barrels of oil a day in the second quarter, a figure that was reduced by about three per cent because of fires in the area.
The Shell Plc-led LNG Canada project in Kitimat is on track to begin shipping cargoes by the middle of the decade. The plant is estimated to cost $40 billion, and its first phase is expected to produce about 14 million tonnes of LNG tons a year.