Anti-dumping Duty Could Have ‘Significant’ Impact on LNG Canada Costs

A 45.8% anti-dumping duty imposed by Canada on industrial steel imports from China, South Korea and Spain could have a significant impact on project costs for Shell’s proposed LNG Canada export terminal, a company spokeswoman said October 31.

Shell and its Chinese, South Korean and Japanese partners haven’t yet taken a final investment decision (FID) on the $40bn project, but they have set a November 30 deadline for competing bids from four fabrication yards to build the project’s modules. They are also conducting a review that will lead to the appointment of a prime contractor to be in charge of engineering, procurement and construction (EPC), a key milestone ahead of making a FID, which the partners now say they will do by the end of 2018.

LNG Canada, along with several other LNG promoters and suppliers, had sought an exemption from the anti-dumping duty, but were denied by the Canadian International Trade Tribunal. They are now appealing that refusal to the Federal Court of Appeal.

Susannah Pierce, director of external relations for LNG Canada, told NGW in an email that the potential imposition of the duty will have to be factored in to future internal discussions by the project’s partners, including those surrounding the EPC and any future FID.

“The EPC selection won’t be held up but we will have to hold the impact of the duties as a contingency which will increase overall project cost,” she said. “As the EPC process is not yet complete, we don’t have a picture of the total impact, but it could be very significant.”

Dale Lunan