Hanwha Ocean Co., Ltd. (“Hanwha Ocean”) today announced that it has entered into a non-binding Memorandum of Understanding (“MOU”) with Kanata Clean Power & Climate Technologies Corp. (“Kanata”) regarding the proposed development of Kanata LNG, a floating liquefied natural gas (“FLNG”) export project planned for Prince Rupert, British Columbia, Canada. Kanata’s proposed project is expected to have a capacity of up to 12 million tonnes per annum (MTPA).
Kanata estimates total capital expenditures for the project at approximately US$15.7 billion, subject to final engineering, commercial arrangements and regulatory approvals. Under the terms of the MOU, Hanwha Ocean and Kanata intend to explore potential opportunities for cooperation across several technical and commercial areas, including:
- Engineering and construction of floating LNG production and related facilities;
- Operations and maintenance services over the facilities’ operating life;
- Strategic equity participation by Hanwha Ocean or affiliated entities;
- Long-term LNG purchase arrangements; and
- Midstream solutions including LNGC, LNG BV and more.
Philippe Levy, President of Hanwha Ocean’s Energy Plant Unit, said: “Canada has world-class natural gas resources and strong long-term potential to support reliable LNG supply to Asia-Pacific markets. We are pleased to establish this strategic relationship with Kanata and to explore how Hanwha Ocean’s FLNG, offshore engineering, construction, and marine energy capabilities could contribute to the proposed Kanata LNG project. Hanwha Ocean has extensive experience delivering complex offshore energy facilities and believes floating LNG can offer a flexible and scalable pathway for new LNG export developments where the technical, commercial, environmental, and regulatory conditions are properly aligned. This MOU is an important first step. Significant work remains before any final investment or project execution decision can be made, and we look forward to working with Kanata to evaluate the opportunity in a disciplined and responsible manner.”
Kanata LNG is being developed as a floating LNG export facility located near Prince Rupert, North America’s closest Pacific port to Northeast Asia. The project is intended to leverage modular construction and marine-based liquefaction technology to provide scalable export capacity. Kanata has also offered participating First Nations the opportunity to acquire up to a 50 percent ownership interest in the project, subject to negotiations, financing arrangements and applicable approvals.
Robert F. Delamar, Chief Executive Officer of Kanata Clean Power & Climate Technologies Corp., said: “We are delighted to welcome Hanwha Ocean as a strategic partner in Kanata LNG through this Memorandum of Understanding. Hanwha brings globally recognized capabilities in floating infrastructure, shipbuilding and energy systems, making it an outstanding collaborator as we advance the project.”
The MOU described herein is non-binding and intended solely to express the preliminary intentions of the parties to explore potential cooperation. This announcement does not create any legally binding obligations, nor does it obligate either party to enter into any definitive transaction, execute commercial agreements, or proceed with negotiations. Any future commitments regarding engineering, investment, operations or LNG offtake remain entirely subject to further due diligence, the negotiation and execution of binding agreements, corporate board approvals and customary conditions.
The proposed Kanata LNG project remains subject to numerous approvals and conditions, including environmental assessments, engagement with Indigenous communities, regulatory approvals and the negotiation and execution of definitive commercial agreements.
Hanwha Ocean is currently participating in discussions regarding Canada’s future submarine capability requirements. This cooperation is consistent with Hanwha’s ongoing efforts to contribute to Canada’s industrial objectives within the scope of its Industrial and Technological Benefits (ITB) considerations. The purpose of this MOU is to explore potential areas for industrial cooperation in Canada, including, where permissible under applicable procurement rules, opportunities related to the Canadian Patrol Submarine Program in which Hanwha intends to participate.
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