LNG plans for Kitimat turns BC doom town to boom town: mayor

VICTORIA—The sense of excitement in Kitimat is palpable, says Mayor Joanne Monaghan.

The northwest British Columbia town cited by Census Canada in March 2007 as the community with the greatest population decline in Canada now is looking at multi-billion-dollar investments in proposed liquefied natural gas projects, aluminum smelter upgrades and the Northern Gateway pipeline.

Once posting a rental vacancy rate of 44.5 per cent, Kitimat now is brimming with construction jobs, fighting traffic jams and worrying about rising rents, said Monaghan.

Monaghan, elected to Kitimat’s council for the past 38 years, says residents are pinching themselves and wondering if it’s all real.

This month’s opening of Kitimat’s first Tim Horton’s outlet confirmed for Monaghan that economic reality hasn’t fully set in among residents.

“When I announced we would have a Tim Horton’s and people would meet me on the street they wouldn’t talk about the LNG, they would say ‘We’re getting a Tim Horton’s',” said Monaghan.

Now, Monaghan said her council is seriously considering operating a local ferry service to bring aboriginal workers to Kitimat from area coastal villages of Klemtu, Hartley Bay and Bella Bella to work on what will be thousands of construction jobs.

“I honestly felt (four years ago) I was the mayor of doom and now I feel like the mayor of boom,” she said.

After more than a year of hype from the provincial government about a jobs plan focused on LNG development, Monaghan’s community and others are beginning to feel the creeping effects of the flurry of investment in the resource.

Recently, B.C. Premier Christy Clark likened the province’s LNG development opportunities to that of the Alberta oil sands.

Her government’s jobs plan forecasts one LNG export plant in operation by 2015 and three in operation by 2020.

The LNG projects involve building pipelines from northeast B.C.’s natural gas fields to LNG terminals near Kitimat, from where the product will be shipped to Asian markets.

LNG is natural gas that is cooled to the point where it can be loaded onto tankers.

Rich Coleman, B.C. minister for energy, mines and natural gas, said the province is in negotiations with at least three LNG development proposals in the Kitimat area.

Two others are proposed for the Prince Rupert area, about 120 kilometres northwest of Kitimat, and billionaire Krishnan Suthanthiran has proposed that Kitsault, a northwest mining ghost town he bought for $7-million in 2005, be used for an LNG export facility.

Two of the five proposed LNG projects highlighted by Coleman have already been granted federal export permits.

The Douglas Channel Energy Project is described as a small LNG plant, but will likely be the first in operation in the Kitimat area by 2015.

The project, already under construction, proposes to use the existing natural gas pipeline to Kitimat from the northeast to transfer the gas to a barge-based LNG plant in the Douglas Channel, where it will be loaded onto tankers.

Kitimat’s Haisla Nation aboriginals are business partners in this project.

The proposed Kitimat LNG project, which also has an export permit and is located on Haisla Nation land, is a joint venture of Apache Corp. and Chevron Ltd.

Late last year, Chevron purchased operating interest in Kitimat LNG and the Pacific Trail Pipeline from EOG Resources Canada Inc., and EnCana Corp., prompting industry analysts to state that LNG exports from Kitimat are getting closer to reality.

The third proposed LNG Canada project at Kitimat is being developed by Shell Canada Ltd., and joint venture partners Korea Gas Corporation (KOGAS), Mitsubishi Corporation and PetroChina Company Ltd.