Trudeau Backs LNG Canada Against Threat of Steel Duties

(Bloomberg) -- Prime Minister Justin Trudeau assured Royal Dutch Shell Plc’s newly sanctioned $31 billion liquefied natural gas project that it won’t be hindered by trade barriers such as steel import duties.

“Trade barriers won’t be an impediment to moving forward on this project," Trudeau told a news conference in Vancouver Tuesday following the announcement that Shell and its four partners were moving ahead with LNG Canada, the country’s largest private sector investment ever.

Concerns linger, however, over an unresolved dispute over Canada’s decision to impose duties on steel imports earlier this year. The duties would affect the roughly 140 complex steel modules -- each as tall as a 10-story building and weighing as much as 10 jumbo jets -- that LNG Canada has to import from China. LNG Canada has challenged the duties in court, arguing no Canadian assembly yard has the experience nor the water access to ship them to site in Kitimat on Canada’s northwest coast. The Federal Court of Appeal is expected to issue a decision soon.

"There are specialized components that need to be imported," Trudeau said. "But there will be also lots of Canadian steel used in the construction of this plant."

He didn’t respond to a question asking how the government would respond to an unfavorable decision by the court.

Canada pledged C$275 million ($215 million) of federal support for the project, along with the commitment on trade barriers.

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