CALGARY C The British Columbia government stands to achieve $2.9 billion each year if three liquefied natural gas vegetation is built on the province’s coastline, based on a new report funded by among the LNG project proponents.
The Conference Board of Canada noted inside a new report, paid for with a subsidiary of Malaysia’s state-owned oil company and LNG proponent Petronas, that “there is a superb deal of uncertainty all around the number, size and timing on the projects that may proceed because the (LNG) industry is constantly on the develop.” However, the Monday report suggests that such an industry could lessen the province’s unemployment rate and boost business activities.
The think-tank’s report noted that three LNG projects, with a cumulative creation of 30 mega tonnes of LNG per year, could generate $6.2 billion in revenues for multiple amounts of government and produce more and more people into B.C., boosting the province’s inflation rate by about 0.25 per cent.
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The Conference Board did note that no projects have been sanctioned yet, and therefore none are currently under construction.
Last week, AltaGas Ltd. announced it had been not able to find enough customers to buy LNG from its proposed Douglas Channel facility and also the company shelved the work as a result.
Douglas Channel LNG was widely considered one of the projects most likely to be built-in B.C. Analysts now the company’s inability to find sufficient customers for any smaller scale LNG project is really a bearish sign for the larger projects.
“We have made significant progress in development and permitting of the project, and we believe the work could deliver LNG to Japan at very competitive prices. However, without a meaningful off-take agreement, the consortium can no longer continue the development of the project,” AltaGas CEO David Cornhill said during his company’s fourth-quarter earnings call.
AltaGas is partnered with Tokyo-based Idemitsu Kosan Global on the project, which was originally scheduled to be cooling gas to the liquid state for export by 2018. AltaGas did not provide a timeline when ever it could revisit the Douglas Channel LNG project.
In February, Royal Dutch Shell PLC said it expects to create a final financial commitment on its LNG Canada project near Kitimat later this season.
Petronas, which funded the report through its Calgary-based subsidiary Progress Energy, announced this past year it would build its North american LNG project when the province’s LNG taxes were manageable and pending the outcome of environmental reviews, that are still ongoing.
Financial Post
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