The BC LNG Export Co-Operative LLC announced that the Douglas Channel liquefied natural gas (LNG) project, Canada’s first LNG export terminal, will experience increased costs and a delayed opening. BC LNG’s managing director Tom Tatham told the Calgary Herald that the facility will cost “millions more” than its initial CA$400 million (US$403 million) with an expected inservice date in the second-quarter of 2015 rather than the first-half of 2014.

The facility is expected to have a capacity to convert up to 125 million cubic feet (MMcf) per day of natural gas into 900,000 tons per year of LNG.

The increased costs are a result of the addition of a 45-megawatt, gas-powered electrical generation plant as British Columbia passed new legislation requiring the project to be self-sufficient, which disallows the terminal from tapping into the province’s power grid to liquefy the natural gas.

Tatham added that producers will receive less than anticipated for their LNG supplies as potential Japanese customers have taken longer than expected to sign onto the project, while also expressing a desire to utilize a North American price index for North American LNG rather than the much higher Japanese price index. The difference in these prices is approximately CA$12 (US$12).

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