Thank you very much, Madam Chair.
Members of the committee, thank you for inviting me to speak to you here today on behalf of LNG Canada on this important subject.
We fully support this committee's efforts to examine how the export of Canadian clean technologies and products can help shape and support a low-carbon future. I'm happy to talk to you this morning about how LNG Canada fits into that strategy, both here at home but also abroad.
As you know, LNG Canada is a joint venture with five international partners: Shell, Petronas, PetroChina, Mitsubishi and Kogas from Korea. While we here at LNG Canada are proudly Canadian and I myself am Canadian-born, -raised and -educated, we do indeed have a very global outlook.
To start with, we began with a very bold vision. That was to set the benchmark for economically, environmentally and socially responsible LNG development in Canada, working collaboratively with first nations, indigenous groups and local communities, non-governmental organizations and local, provincial and federal levels of government.
Our liquefied natural gas and export facility is now in its third year of construction in Kitimat, British Columbia, and is located on the traditional territory of the Haisla Nation. It represents the single largest private-sector investment in Canadian history, and it has already begun to benefit communities and provincial and national economies with meaningful, lasting employment and social investment. To date, the value of our awarded contracts and procurement in British Columbia alone is worth more than $3 billion.
Revenues from our project will start flowing to governments as we enter into production and are delivering low-carbon LNG to customers. These will reach tens of billions of dollars over the course of our 40-year life, and we are on track to deliver our first cargo by the middle of this decade.
LNG Canada will provide a security of supply for global LNG markets that rely on Canada's natural gas reserves to advance their economies and to reduce global GHG emissions, as natural gas replaces such higher-emitting sources of energy as coal. This is important in the context of commitments that Canada has made to reducing GHGs, while helping our international partners meet their own climate change commitments.
While we'll be the first major LNG company in Canada to export internationally, we're entering a highly competitive global market looking for low-carbon energy.
Our project is advantaged by access to low-carbon natural gas right here in British Columbia. We're located in a harbour that is ice-free year-round. It's at the end of the Douglas Channel in Kitimat, about 650 kilometres north of me here in Vancouver. Our shipping distance to north Asia is about 50% shorter than that from the U.S. Gulf of Mexico, and it avoids the Panama Canal.
Together with our EPC contractor, JGC Fluor, we designed a project to have the lowest carbon intensity of any large-scale LNG plant anywhere in the world, and the GHG emissions from our Kitimat operation will be lower than those from any facility. That's a full 35% lower than the world's best-performing facilities and 60% lower than the global weighted average for equivalent plants. This is all underpinned by our use of energy-efficient gas turbines and the latest methane mitigation technologies, and that's what is going to help us reach our low emissions standards.
LNG Canada will use B.C. natural gas that is produced with the highest standards and compressed using renewable energy from the B.C. hydro grid. A good example of putting these standards into practice is provided by Shell's Saturn gas plant. Located in northeastern British Columbia, it is fully electrified.
As I mentioned, natural gas is displacing coal for power use and production in cities with air pollution problems, where renewable resources are limited and where consistent energy supplies or firm power is required.
We know that future population growth and development around the world will require more energy with fewer CO2 emissions. To that end, LNG provides CO2 emissions 50% lower than those from coal. That's really the big reason that LNG is displacing coal in so many places and why this represents an opportunity for Canada, which has an abundance of lower-carbon natural gas.
Demand is indeed growing in places such as China, where natural gas is expected to almost triple by the year 2040. LNG from all sources, including ours, will make up 60% of China's demand for imported natural gas, and global LNG demand is expected to hit 700 million tonnes by the year 2040. According to Shell's latest market outlook report, that's up from 360 million tonnes in 2020, so it's almost double. Asia is expected to drive about 75% of this growth as LNG substitutes for higher-emissions energy sources, and that's going to tackle items like air quality concerns while at the same time meeting emissions targets.
Of course, this isn't to say that LNG will displace more carbon-intensive forms of energy all on its own. You've already heard how the clean-tech sector in Canada is an increasingly busy place with hundreds, if not thousands, of companies driving innovation and finding new export opportunities. We believe that LNG is but one tool in the low-carbon tool kit, and that tool kit obviously includes renewables. While natural gas complements renewables as a baseload power due to intermittencies in energy supply, it is not likely to displace it fully, nor is LNG going to slow the build-out of renewables in electricity sectors in countries such as China. Mostly that's due to pricing. Renewables in the long term are less expensive than natural gas and LNG.
As technologies continue to develop and as businesses, builders and homeowners turn to energy-saving efficiencies such as retrofits, energy requirements, in general, will change, and they may even decrease in certain scenarios. We're certainly starting to see those changes in our resource sectors. I already mentioned Shell's fully electrified plant in Groundbirch, B.C. The fact is that we are seeing innovation and advancements up and down the value chain. These are absolutely critical as our sector turns its focus to reaching carbon neutrality.
In the past year, and excitingly so, we've seen net-zero LNG shipments reaching ports in Asia and Europe. We're excited to be entering an environment where net zero can actually be achieved. I think this is critical, because creating space in the LNG marketplace going forward—our project has a 40-year lifespan—really means, for us, identifying those opportunities across the value chain upstream, at the point of production and indeed on the shipping routes.
Picking up on that, I'd like to point out another example that demonstrates how the LNG Canada project is creating momentum towards a lower-carbon future and at the same time creating local opportunities. HaiSea Marine is a local partnership formed between the Haisla Nation and north Vancouver-based Seaspan.
HaiSea Marine has a large contract with LNG Canada to build and operate the escort and harbour tugs required for our export facility in Kitimat. They are going to use battery-electric power and natural gas instead of diesel fuel, and they're going to form one of the greenest tug fleets ever assembled. They are designed by Canadian, Vancouver-based naval architects and marine engineers Robert Allan. These new escort and harbour tugs are expected to reduce carbon dioxide emissions by up to 10,000 tonnes per annum compared to their diesel-fuelled alternatives, with major reductions in other oxides and particulate matter as well.
In addition to creating local, long-term jobs that will benefit the Haisla and other nations on B.C.'s northern coast, HaiSea Marine really plugs into the full value-chain proposition I've talked about: lower-carbon Canadian natural gas; world-leading low emissions at our Kitimat export facility; advantageous export routes to international markets; and markets in countries that are focused on bridging to low-carbon energy sources, and ultimately to all ultra-low and zero-emitting sources.
Together with our partners and with support and encouragement from all levels of government, LNG Canada will play an important role in this energy transition.
Thank you very much. I'm happy to answer your questions.