A massive liquefied natural gas (LNG) export project in Canada has received final approval from its partners, LNG Canada said on Tuesday, making it the first major new project for the fuel to win approval in recent years.

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First gas from the C$40 billion ($31 billion) project, led by Royal Dutch Shell Plc, is expected before 2025, aiming to feed an expected surge in demand for the super-chilled fuel from Asian buyers, mainly China.

LNG Canada is the largest private-sector investment project in Canadian history, Prime Minister Justin Trudeau said at a news conference in Vancouver.

The announcement provides a much-needed boost for Trudeau`s ruling Liberals, who have struggled with an exodus of global majors from Alberta`s oil sands and setbacks in building a crude pipeline expansion to Canada`s Pacific Coast.

"We can’t build energy projects like we did in the old days where the environment and the economy were seen as opposing forces," Trudeau said. "They must go together."

Canada is committing C$275 million to infrastructure and environmental performance measures related to LNG Canada, which will have the lowest carbon intensity of any large LNG facility in the world, Trudeau said.

The project will move LNG to Asia faster than from the U.S. Gulf Coast. With global LNG demand expected to double by 2035, much of the growth will come from Asia where gas is displacing coal, chief executive of Royal Dutch Shell Ben van Beurden said in a separate statement.

"LNG Canada is well positioned to help Shell meet the growing needs of customers at a time when we see an LNG supply shortage in our outlook," he said.

Stakeholders in LNG Canada - Shell, Malaysia`s Petroliam Nasional Bhd, PetroChina Co Ltd, Korea Gas Corp (KOGAS) and Japan`s Mitsubishi Corp - have all made final investment decisions, LNG Canada said.

"Getting an LNG project to a final investment decision is like a moon landing," said Maarten Wetselaar, Shell`s integrated gas and new energies director, in Vancouver. "It is very, very difficult to do, and requires teamwork."

Shell said construction at Kitimat, British Columbia, will start immediately.

In a statement, Mitsubishi said the total development cost of the planned Kitimat LNG plant is about $14 billion. The cost for the liquefaction plant and a 670-kilometre pipeline to connect gas to the plant will exceed 2 trillion yen ($17.6 billion), a company official said.

Shell said the project will initially export LNG from two processing units or trains totalling 14 million tonnes per annum (mtpa). The project may add two more trains totalling 14 million tpa, Mitsubishi said.

PetroChina and KOGAS approved project financing late last week while Shell, Petronas and Mitsubishi made announcements on Tuesday.

KOGAS said this will be Korea`s first major project in Canada.

The joint venture of JGC-Fluor Corp has been appointed as the project`s engineering, procurement and construction contractor.

Pipeline operator TransCanada Corp said on Tuesday it will proceed with construction of its Coastal GasLink pipeline, which will transport natural gas from the Montney gas-producing region near Dawson Creek, British Columbia, to the LNG Canada facility.

The project will boost Canada`s oilpatch, which has struggled to attract investment due to the government`s stumbles in winning regulatory approval to expand the Trans Mountain oil pipeline.

Natural gas producers such as Encana Corp and Tourmaline Oil Corp stand to gain as Canada`s depressed gas prices rise, Raymond James analysts said. Smaller pipeline companies including Pembina Pipeline Corp will also benefit, said RBC analyst Robert Kwan.RISING APPETITE

LNG Canada is the first large-scale conventional new LNG project to reach a final investment decision (FID) since 2013, said Saul Kavonic, director for Asia Pacific markets and head of energy research at Credit Suisse in Australia.

"LNG Canada`s FID would signal the appetite to invest in LNG is back," Kavonic said.

The project owners will provide their own natural gas supply and will individually market their share of LNG, LNG Canada said in the statement.

The construction decision comes amid a Sino-U.S. trade dispute that has led to tariffs being imposed by China on LNG shipments from the United States, threatening U.S. President Donald Trump`s energy dominance plan.

Energy consultancy Wood MacKenzie said it appeared project partners had pushed hard to reach an investment decision, with rival projects progressing in Qatar, Russia, Mozambique and the United States.

"I don`t see it as a case of replacing U.S. cargoes, more about meeting projected demand growth," said Wood Mackenzie analyst Nicholas Browne.

($1 = 1.2828 Canadian dollars)

($1 = 113.6900 yen)

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)