Rio Tinto has reportedly completed a deal for the lease and sale of its land and wharf Kitimat, British Columbia, to LNG Canada for a total consideration of US$576 million (approx. CAD$760 million). LNG Canada has also agreed, as a part of the deal, to build a replacement wharf for Rio Tinto’s aluminium export shipments from the modernized B.C. Works smelter near Kitimat.
For the uninitiated, LNG Canada is a joint venture between Shell, Kogas, Mitsubishi, Petronas and PetroChina. Apparently, various options for the wharf were being discussed since February 2014, when LNG Canada and Rio Tinto had entered into an options agreement for the purchase and lease of the land.
Since its commission in 1954, the B.C. Works smelter has been a major presence in British Columbia. Using the proprietary AP40 smelting technology, the smelter has been modernized with the production beginning in 2015. Reports confirm that emissions at the smelter had been cut in half and the capacity grew by nearly 48% to 420,000 tons per year, without enlarging the plant’s carbon footprint.
Citing reliable sources, the construction of the replacement wharf for Rio Tinto’s shipment is expected to cost about $150 million and should be completed by third quarter of 2020. LNG Canada would be looking to develop a 14 million ton a year LNG export facility at the acquired Kitimat property, which the group says will be one of the largest energy investments in Canada.
LNG Canada’s export facility will be built to specifically have the lowest carbon intensity of any large scale LNG plant in operation globally, the sources mentioned. It aims to realize this goal by using renewable hydropower from B.C. Hydro and extremely efficient gas turbines. Constructed on a partially developed industrial site, the plant will have deep water ports and access to power, rail and road supplies.