August 2013

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Building a Gateway to Asia Market Pulse Projects – and equipment opportunities – are busting out all over British Columbia's Prince Rupert and Kitimat, fueled by LNG 'liquid gold.' By Tom Van Dusen It's a tale of two cities, two small cities that are poised to become much bigger – and a lot richer. Along the way to the level of prosperity other places can only dream of, these two communities on the northern coast of British Columbia will be providing millions of dollars worth of opportunities to construction companies, contractors and heavy equipment suppliers. Let's consider them separately. With a population of little more than 12,500 people, Prince Rupert has one huge competitive trade advantage that's now being milked for all it's worth. The city is at the North American end of the shortest oceanic trade route between this continent and Asia's rapidly growing economies – and it's not just a few hours difference. By freighter, Prince Rupert is 36 hours closer to Shanghai than Vancouver and 68 hours closer than Los Angeles. With industrial and export good times rolling in B.C. like never before, the Prince Rupert Port Authority is showcasing its enviable advantage. Among its major attributes, it boasts one of the deepest natural harbors in the world, a harbor that's sheltered and ice-free, providing unobstructed access to the shipping lanes of the Pacific. This land, water and air transportation hub of B.C.'s North Coast was incorporated in 1910. The settlement was founded by Charles Hays, manager of Grand Trunk Pacific Railway, who had grand ideas about berthing large passenger ships and developing tourism. Unhappily, the plans were scuttled when Hays went down aboard the Titanic in 1912. Unlike its founder, Prince Rupert is more buoyant than ever. Charles Hays would no doubt be proud. The city is being recognized as a North American gateway to Asia, creating global interest in the port and the Northwest region of the province for investment and commerce. A three-hour drive from Prince Rupert, Kitimat isn't being left out of the North Coast boom. With a population of about 8,500 people, the community was built in the 1950s by the Aluminum Company of Canada. Plans for big, billion-dollar projects are piling up in Prince Rupert and Kitimat. They're mostly natural resources-related and the magic words are "liquified natural gas (LNG)." The Canadian government has approved a 20-year export license for an LNG facility, a production total of 200 million tons, to be built in Kitimat by Chevron Canada and Apache Canada, the first such license issued in the country. The $4.5 billion liquefaction plant will be tapping into resources in the Liard and Horn river basins, two of the most prolific shale gas sites in North America. The Kitimat operation has received all significant environmental approvals and the $1.3 billion, 290-mile Pacific Trail Pipelines system that'll deliver gas to the LNG terminal has signed a $200 million partnership agreement with 15 First Nations along the route. Beginning this year, construction of the Kitimat facility is expected to take three years, with commercial operations underway late in 2016. Initially, five million tons of LNG will be produced annually, the equivalent of 700 million cubic feet per day. Meanwhile, Shell Canada has announced its intention to build a $12 billion LNG export center in Kitimat. Its partners in the project are Korea Gas Corp., Mitsubishi Corp., and Petro China Co. Unlike the greenlighted Chevron/Apache terminal, a decision to move the Shell-and-partners proposal into development won't be made until mid-decade. In connection with this project, a $4 billion, 435-mile pipeline originating in the Dawson Creek area has been registered. Also deep and ice-free, Kitimat boasts the third largest port on the B.C. coast behind Vancouver and Prince Rupert. Shipping distances to Asia are comparable to Prince Rupert, creating potential rivals for future ocean-going commerce. In many ways, the northern ports are symbolic of a construction and development surge pushing across the (continued on page 20) 18 | www.cedmag.com | Construction Equipment Distribution | August 2013 18_Canada_Feature_KP.indd 18 7/25/13 12:32 PM

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