• Natural Gas News

    Steel Industry Says Canada Sending LNG Jobs to China

Summary

But Canadian fabricators are unable to build - or move - LNG modules

by: Dale Lunan

Posted in:

Natural Gas & LNG News, Americas, Liquefied Natural Gas (LNG), Premium, Editorial, Political, Infrastructure, News By Country, Canada

Steel Industry Says Canada Sending LNG Jobs to China

A lobby group representing the Canadian steel industry charged the federal government on August 20 with sending C$42bn worth of construction jobs to China by waiving potential anti-dumping duties on fabricated steel modules for Canada’s two active LNG export projects.

The two projects – LNG Canada’s 14mn mt/yr project at Kitimat, on BC’s northern coast, and Woodfibre LNG’s 2.1mn mt/yr project at Squamish, north of Vancouver – will be built by assembling modules at fabrication yards in Asia and shipping them to the project sites, where they will be assembled into liquefaction trains.

“The modules will be connected on site, requiring very few construction workers,” the Canadian Institute of Steel Construction (CISC) said in a statement. “Essentially, in doing so, the largest project ever in the history of Canada will be handed over to Chinese businesses and workers.”

CISC was reacting to an announcement by Canadian finance Bill Morneau earlier in August that the LNG Canada and Woodfibre LNG projects would not be subject to anti-dumping duties that have been implemented by the Canadian International Trade Tribunal. A judicial review of the duties is currently underway, but CISC CEO Ed Whalen says Morneau should never have waived the duties for LNG Canada and Woodfibre LNG.

“These two projects, if done in Canada, would have created hundreds of thousands of construction jobs for all trades across the country,” he said. “Projects like these employ skilled workers from all over Canada and not just in the local area. This is a hundreds-of-thousands-of-jobs-lost kind of mistake.”

Canada has been assembling modules for many years for major projects, the CISC statement says, and claims as false any arguments that suggest “Canada does not or can’t do” the fabrication work.

“What is true is that international oil and gas companies want the lowest cost, China’s illegal dumping and subsidizing provides that, the government of Canada will offer the legal framework to allow this to happen and Canadian construction workers no longer have access to projects in Canada,” CISC charged in its statement.

LNG Canada has long maintained that the kind of module construction required of its project can’t be completed in Canada – the modules are too large for Canada’s existing fabrication yards and they’re too big to move over existing road or rail infrastructure.

“The only option possible would be to source modules from module yards in BC that have coastal access to transport large modules by sea,” LNG Canada said in an email to NGW. “LNG Canada couldn’t wait for the expansion of the capacity of BC module yards, nor could we assume any responsibility for building the capacity of Canadian steel fabricators, as some have suggested. Mega projects investing billions of dollars need to be based on the highest degree of certainty for cost and schedule. LNG Canada needs to take advantage of the existing supply/demand opportunity that currently exists in the global energy market.”

The modules for the LNG Canada project weigh up to 7,500 metric tons each, and are as large as 40 metres high, 40 metres wide and 90 metres long. The average module weighs 1,000 metric tons, and the 150 to 220 modules that go into the project carry an aggregate weight of 140,000 to 200,000 metric tons.

The largest modules that can be built in Canada – so-called ‘Alberta modules’ – weigh less than 160 metric tons, LNG Canada’s email pointed out. The maximum road weight in Canada is 75 metric tons, while the maximum legal height for road transport in BC is 4.15 metres and the maximum width is 7.3 metres.

Although Canada’s – and indeed BC’s – fabricators don’t have the capacity to build LNG Canada’s modules, that doesn’t mean the Canadian steel industry will be shut out of LNG development, as CISC claims.

“From steel components and structures for the site, as well as manpower to assemble them, to steel for the pipeline that transports the gas, and steel required upstream for structures, water treatment and handling facilities and wells – the Canadian steel industry stands to benefit greatly from LNG projects moving forward in the province and the country,” LNG Canada said.

As many as 10,000 Canadian workers will be directly employed building the LNG Canada export terminal and the Coastal GasLink pipeline that will deliver feed gas to the terminal.