(EnergyAsia, May 23 2013, Thursday) — Malaysian state energy firm Petronas has taken another step forward in developing its proposed C$5 billion liquefied natural gas (LNG) terminal in western Canada with the award of front-end engineering and design (FEED) contracts this week.

Pacific NorthWest LNG Ltd, a Petronas subsidiary, announced it has awarded the contracts for the Lelu Island terminal near Prince Rupert port in British Columbia to three international contractors, Bechtel of the US, a joint venture between KBR of the US and Japan’s JGC, and a consortium comprising France’s Technip, South Korea’s Samsung Engineering and China Huanqiu.

Due for start-up in 2018, the terminal will initially comprise two trains each with a capacity to export six million tonnes of LNG per year that will be followed by a third train of the same size. The trains would liquefy and export natural gas produced by Petronas subsidiary Progress Energy Canada in northeastern British Columbia.

“These competitive contract awards represent an important next step towards Pacific NorthWest LNG designing and constructing a world-class LNG export facility in the District of Port Edward near Prince Rupert,” the company said. It plans to recruit and hire up to 30 Canadian engineers who will be temporarily embedded with the FEED contractors over the next one to two years.

The plan is to complete the project’s FEED as well as its engineering, procurement, construction and commissioning (EPCC) bids by August 2014. This will enable the company’s shareholders, Petronas and Japan’s Japex, to make the final investment decision on the project by end-2014.

Following completion of the FEED work and awarding of the engineering, procurement, construction and commissioning work, the Canadian team of engineers will be relocated to Pacific NorthWest LNG’s Vancouver office or at the site in the Prince Rupert area.

“This world-class engineering and design work provides a tremendous opportunity to begin the process of creating an LNG knowledge centre here in Vancouver,” said Greg Kist, President of Pacific NorthWest LNG.

“Hiring Canadian engineers and placing them in companies with decades of international experience in LNG engineering will ultimately pay long-term dividends in establishing a base of Canadian LNG engineering expertise in our British Columbia operations.”

British Columbia’s Premier Christy Clark, whose government was decisively re-elected last week partly on the economic momentum provided by the spate of LNG projects flowing into the province, welcomed Pacific NorthWest’s contract award.

“LNG development is a once-in-a-lifetime opportunity to gain a foothold in a global industry, create well-paying jobs for British Columbians today, and keep us on the path to a debt-free BC,” she said.

Pacific NorthWest has signed up Japex Montney Ltd, the Canadian subsidiary of Japan Petroleum Exploration Co Ltd (Japex), as its first customer.

Japex, which had earlier agreed to acquire a 10% stake in Progress Energy’s natural gas assets and the proposed LNG terminal, has purchased 10% of its output for 20 years from 2018.

With the confirmed first sales of both production and equity in the project, Petronas could look to hive off another 40%, leaving it with about half the proposed C$15 billion development.

Petronas will have to move fast as earlier in the month, UK gas producer and trader BG Group revealed more details about its plan to also build an LNG-export terminal in Prince Rupert. The British Columbia government has received at least 10 firm proposals from international companies to build LNG export projects.

BG’s proposed US$16 billion terminal on Ridley Island will export 25 million tonnes of LNG a year or 3.3 billion cubic feet (bcf) per day from 2021. The London-listed company has teamed up with Canada’s Spectra Energy Corp to build a 850-km pipeline to deliver up to 4.2 bcf/day of natural gas from British Columbia and Alberta to the proposed plant.