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“LNG Canada looks like it is pretty much getting over the line, so deciding not to go ahead with it now would be a big surprise,” said Trevor Sikorski, an analyst at Energy Aspects Ltd.

Shell said in 2014 that the project could cost as much as $40 billion (US$31 billion). PetroChina’s announcement Friday about its 15 per cent share implies a total investment of roughly US$23 billion across all partners, according to Bloomberg calculations. With the capacity to eventually export as much as 26 millions metric tons per year, primarily to Asia, it could be the biggest new LNG terminal to be sanctioned in years.

Next Wave

The decision may be the start of a wave of investments for major gas export projects after a supply glut and a price collapse forced the three-year hiatus. Booming demand growth means that 11 projects, including LNG Canada, are likely to receive final investment decisions by the end of 2019, according to Bloomberg NEF.

“We expect this to be the first of many in a new wave of projects which will be developed to meet the market shortfall in the early 2020s, after several years of under-investment,” said Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein.

Shell and its partners are set to announce an FID on the project as soon as next week, Bloomberg News reported Wednesday. Preparations for an Oct. 5 announcement followed by an LNG Canada event at a local golf club the next day are underway in Kitimat, British Columbia, the site of the proposed project, said people with direct knowledge of the activities, who asked not to be identified.

Shell holds 40 per cent of LNG Canada, with Petronas at 25 per cent, 15 per cent each for PetroChina and Mitsubishi, and Kogas with 5 per cent.

“PetroChina’s board approving their portion of funding for the project is a clear sign that the project is sprinting toward FID now,” BNEF analyst Fauziah Marzuki said by email.

–With assistance from Kelly Gilblom, Yudith Ho and Heesu Lee.

Bloomberg.com