Conference Board highlights LNG’s potential, notes its uncertainty in British Columbia

CALGARY C The British Columbia government stands to gain $2.9 billion per year if three liquefied natural gas vegetation is built on the province’s coastline, according to a new report funded by one of the LNG project proponents.

The Conference Board of Canada noted in a new report, paid for with a subsidiary of Malaysia’s state-owned oil company and LNG proponent Petronas, that “there is a superb amount of uncertainty all around the number, size and timing on the projects that might proceed as the (LNG) industry is constantly on the develop.” However, the Monday report suggests that this kind of industry could reduce the province’s unemployment rate and boost economic activity.

The think-tank’s report noted that three LNG projects, with a cumulative creation of 30 mega tonnes of LNG each year, could generate $6.2 billion in revenues for multiple levels of government and produce 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 happen to be sanctioned yet, and for that reason none are currently under construction.

Last week, AltaGas Ltd. announced it absolutely was unable to find enough people to buy LNG from its proposed Douglas Channel facility and the company shelved the work consequently.

Douglas Channel LNG was widely one among the projects that appears to be built in B.C. Analysts now say the company’s wherewithal to find sufficient customers for a smaller scale LNG project is a bearish sign for the larger projects.

“We have made significant progress in development and permitting of the project, and that we believe the work could deliver LNG to Japan at very competitive prices. However, with no meaningful off-take agreement, the consortium can’t continue the introduction of the work,” 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 become cooling gas to the liquid state for export by 2018. AltaGas didn’t give a timeline for when it might revisit the Douglas Channel LNG project.

In February, Royal Dutch Shell PLC said it expects to make a final investment decision on its LNG Canada project near Kitimat later this year.

Petronas, which funded the report through its Calgary-based subsidiary Progress Energy, announced last year it would build its North american LNG project when the province’s LNG taxes were manageable and pending the end result of environmental reviews, that are still ongoing.

Financial Post

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