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Stingray2004 Jun 12, 2015 1:34 AM


Originally Posted by jawagord (Post 7059913)
Conditional Denscity means Petronas has kicked the FID down the road, how far down the road remains to be seen, still better than cancelled.;)

Absolutely incorrect. All technical and commercial components have been to the Petronas consortiums satisfaction.

Two conditions:

1. BC Legislature passes recently mutually agreed Project Development Agreement. Special BC legislature sitting likely sometime in July based upon BC gov't response. Done deal.

2. Federal CEAA environment certification. And that involves a 365-day clock that commenced in 2013 and is still continuing. The clock stopped recently surrounding federal fisheries mitigation requests and some other loose ends. Should be wrapped up by late September according to various sources.

BTW, Petronas, last September, publicly announced their frustration with the long CEAA environment process. The BC EAO already gave environment certification last fall.

Basically a done deal with a couple of matters needed for final wrap-up. :tup:

MalcolmTucker Jun 12, 2015 2:46 PM

Well, I for one wouldn't be spending any big money (buying modules, cutting steel for the bridge) until after the CEAA process passes a reasonable window for litigation. With culturally modified trees on Lelu Island, it should be a pretty easy court process for the Lax Kw'alaams to establish title through a process similar to the Tsilhqot'in. Or the CEAA could recommend an entirely different site be found.

I bet if this project goes ahead, they end up buying out another project to get access to another site for the port.

Stingray2004 Jun 13, 2015 3:58 AM


Originally Posted by MalcolmTucker (Post 7060439)
With culturally modified trees on Lelu Island, it should be a pretty easy court process for the Lax Kw'alaams to establish title through a process similar to the Tsilhqot'in. Or the CEAA could recommend an entirely different site be found.

A bit more background is required. Both the proponent, Petronas, as well as the government have been engaged behind the scenes since 2013 on Lelu Island with the Lax Kw'alaams. The Lax Kw'alaams had apparently no objection to date.

A concern was Flora Bank, just off Lelu Island, which contains eelgrass and apparently is a stopover for juvenile salmon at the mouth of the Skeena River.

In fact, as part of the consultation process with the Lax Kw'alaams et al, major mitigation measures were put into place. Instead of a ~3 km trestle to the offshore LNG marine loading facility, which required some dredging at the periphery of Flora Bank (potentially disturbing Flora Bank) Petronas decided to pursue another route - a $1 billion suspension bridge (imagine that!) completely bypassing even the periphery of Flora Bank.

One must also remember that Lelu Island is separated by just roughly 100 feet of channel water with Ridley Island - the major NW BC federal port with its major coal port and grain-loading facilities.

Petronas, even relatively recently, undertook very expensive 3-D underwater modelling of Flora Bank confirming minimal impact upon Flora Bank for the CEAA. Even recent federal fisheries input suggested further non-major mitigation measures in that regard.

Problem was that the Lax Kw'alaams did not have this info at hand prior to their "vote", unfortunately. And from all reports both Petronas as well as the gov't have been meeting with the Lax Kw'alaams, behind the scene, since then, and apparently matters are progressing well.

What ya also need to understand is that the Lax Kw'alaams are situate roughly 50 km north of Prince Rupert. Much closer to the Lelu Island is the Metlakatla FN, which signed a "project benefits agreement" with Petronas just last December.

As did the Kitselas FN, which are situate along the Skeena River. Both FNs also value their heritage fishery akin to the Lax Kw'alaams but obviously take a different view on Flora Bank.

BTW, the Lax Kw'alaams are a break-away group from the Tsimshian Tribe, which has been the historical name for the Prince Rupert area NW coast FNs. And the Metlakatla FN as well as the Kitselas FN are part of the official Tsimshian Tribe.

Even the Lax Kw'alaams have admitted, in a G & M article about a month back, that if Petronas decided to proceed with their proposed LNG facility on Lelu Island "they would be unable to stop it through the Courts". [paraphrased]

Again, behind the scenes the parties are currently apparently progressing in resolving any concerns about Flora Bank vis-a-vis Skeena fishery.

As for the SCC's Tsilhqot'in decision, that was a very unique case involving unique factors. And even then, the Tsilhqot'in FN only obtained 5% of their claim in terms of aboriginal title. Lands in the desolate far west Chilcotin abutting the coast mountain range. Also, no other BC FN claimed that territory as part of their land claim.

More importantly, the Tsilhqot'in were involved in the so-called Chilcotin Indian War" against outsiders on that 5% territory, back in the day, repelling outsiders from that area.

And the Tsilhqot'in met the legal test, on an evidentiary basis, concerning the "Exclusivity Test" - proof of keeping others out, requiring permission for access to the land, the existence of trespass laws, lack of challenges to occupancy showing the FN's intention and capacity to control its lands.

I know of no other BC FN that is currently pursuing a similar aboriginal title land claim through the BC Courts. For many reasons. Almost all BC FNs have over-lapping land claims. For example, at the BC Treaty Commission, all FNs on Van Isle claim each others territory. And many Van Isle FNs claim territory in Metro Vancouver.

And Metro Vancouver FNs claim each others territory and Van Isle territory as well as interior FN territory. Same situation involving interior BC FNs. No wonder, after 20+ years and roughly $1 billion spent at the BC Treaty Commission, just a few treaties have been generated.

Unlike the Tsilhqot'in, which repelled invaders on that west Chilcotin desolate area, ergo meeting the SCC's "Exclusivity Test" for aboriginal title, the Lax Kw'alaams went in a completely opposite direction `back in the day`.

When the Hudson's Bay Company set up Fort Simpson - roughly 50 km north of Prince Rupert (where Lelu Isle is situate) the Lax Kw'alaams abandoned their then Prince Rupert villages and set up new villages outside the gates of the Hudson Bay's Fort Simpson. Absolutely cannot see the Lax Kw'alaams meeting the SCC`s "Exclusivity Test" thereto.

BTW, today Fort Simpson is known as Port Simpson but since the Lax Kw'alaams inhabit Port Simpson it is also known as Lax Kw'alaams.

More importantly, both the Lax Kw'alaams as well as the much larger Tsimshian FN (inclusive of both the Metlakatla FN and the Kitselas FN, which have already signed project benefit agreements withe Petronas) have over-lapping land claims inclusive of Lelu Isle. Info is freely available at BC Treaty Commission website.

Not withstanding that the Lax Kw'alaams likely would not be able to meet the SCC`s "Exclusivity Test", they also cannot initiate an aboriginal land title claim in the Courts with these over-lapping FN land claims. Dead in the water right there.

As for any potential litigation arising out of likely eventual CEAA certification of Petronas - no such litigation was ever commenced (or even hinted at) arising out of last years BC EAO enviro certification of the proposed Petronas LNG project.

Ergo, I guess we will both agree to disagree.

Stingray2004 Jun 13, 2015 5:12 AM

BTW, great read on BC`s LNG potential and also corroborates much from my own personal sources:


Why The Go-Ahead For Pacific NorthWest LNG Is A Big Shot In The Arm For Canada’s Energy Industry

Financial Post
Claudia Cattaneo
June 13, 2015 12:42 AM ET

It took years longer than expected, big government incentives and big benefits packages for First Nations, but British Columbia finally locked up its first project to export liquefied natural gas (LNG).

If remaining conditions are met and aboriginal holdouts pacified, Pacific NorthWest LNG, led by Malaysia’s Petronas, will invest an initial $12 billion to produce and ship Canadian natural gas to Asia. TransCanada Corp. will build an associated pipeline through the province’s north at a cost of more than $5 billion to link shale gas fields to the liquefaction terminal.

The Petronas-led consortium said Thursday it will proceed with the liquefied natural gas export project in British Columbia, subject to two key conditions.

It’s a big deal. With other LNG projects waiting in the wings, the announcement could be the biggest shot in the arm for Canadian energy since the early days of the Alberta oilsands boom.

“This is a significant milestone for us,” deputy premier and natural gas development minister Rich Coleman said Friday.

“Obviously it means we can be competitive globally … This is great news for British Columbia.”

Late Thursday, after convening in Vancouver to review all the details and even traveling to the Prince Rupert area to meet with aboriginal communities, the Petronas-led consortium said it was satisfied with the required technical and commercial components and announced its conditional approval to go ahead.

Its partners are investors from China, Japan, India and Brunei who agreed to long-term supply contracts.

B.C. gas that was sitting in ground with nowhere to go “is basically sold,” Coleman said.

Coleman, appointed by Premier Christy Clark to get the LNG sector off the ground in a province generally hostile to energy production, transportation and infrastructure, said he is confident the group’s remaining conditions would be met, creating thousands of jobs in construction, services and drilling. Indeed, exports of LNG to Asia will mean a new market for natural gas producers in Western Canada, where prices have been depressed because of the discovery of shale gas in the United States.

The B.C. legislature will convene in July to approve the project, satisfying the first condition, he said.

The second condition is a positive regulatory decision by Ottawa, following the completion of a review by regulators focused on mitigating damage to a salmon spawning area. If the review is completed after the summer, cabinet approval may have to wait until past the October federal election.

The Lax Kw’alaams First Nation rejected last month $1.14 billion in benefits over 40 years offered by the LNG consortium over concerns about the impact on the Flora Bank, a salmon habitat adjacent to the terminal site on Lelu Island.

“We will work with them to solve their issues,” Coleman said. “There is some additional design work and some research being done to accommodate those concerns. As we come through that, you will see that the Lax Kv’alaams will come together with other First Nations that have already endorsed the project.”

If conditions are met in the coming months, construction could start in the second half of the year and the first LNG cargo could sail in 2019, he said. If more stages go ahead, the project could mean a $36 billion investment over time.

“This is a truly historic announcement; once-in-a-generation stuff here,” John Winter, president and CEO of the BC Chamber of Commerce, said in a statement. “It is rare that we witness a brand new industry coming to B.C. and we’re all on the ground floor for the jobs and economic activity that will come with this decision.”

A group led by Calgary-based AltaGas Ltd. is planning to give the green light to its Douglas Channel LNG project in Kitimat by the end of 2015, and a group led by Royal Dutch Shell PLC is working toward a final investment decision in mid-2016 for its LNG Canada project in Kitimat.

“Liquefied natural gas has the potential to diversify our energy markets and product offering, creating jobs and economic growth for Canadians,” federal natural resources minister Greg Rickford said in a statement.

British Columbia had to lower its expectations on fiscal terms to encourage the industry’s startup; Ottawa did its part by increasing the accelerated capital cost allowance to 30 per cent from eight per cent.

Aboriginal communities have been offered billions in cash payments and benefits, including jobs and contracting opportunities.

Many steps remain to be taken before West Coast LNG becomes a reality. If they are, it will shift the energy sector’s centre of gravity to B.C. from Alberta, where the new NDP government wants to increase taxes and royalties.

Denscity Jun 18, 2015 5:45 PM

Saw on BC1's scroll that the province has awarded an Environmental Certificate for an LNG terminal? in Kitimat.

Stingray2004 Jun 19, 2015 2:33 AM


Originally Posted by Denscity (Post 7067156)
Saw on BC1's scroll that the province has awarded an Environmental Certificate for an LNG terminal? in Kitimat.

Yep. The Royal Dutch Shell LNG consortium for Kitimat. They substituted their federal CEAA process for the BC EAO environmental process and received both their BC and federal environment certificates yesterday.

If Petronas had done same, they would have already received their fed environment certification. In any event, the BC LNG minister (working very closely with the Shell proponents) indicates their FID will be as early as the 1st quarter of 2016. My sources indicate the last quarter of 2016. But I digress.

Shell's capex will initially be in neighbourhood of $24 billion (rising to ~$40 billion with latter addition of liquefaction trains). In any event... all good stuff!



Wed Jun 17, 2015 6:38pm EDT

UPDATE 2-Shell-Led Canadian LNG Deal Gets Environmental Approvals

By Julie Gordon

(Reuters) - Canada's environment ministry said on Wednesday it approved a Royal Dutch Shell Plc-led liquefied natural gas export terminal on British Columbia's coast, contingent on the project meeting 50 environmental, social and operational conditions.

In her decision, federal Environment Minister Leona Aglukkaq concluded that the effects of the proposed LNG Canada project "are justified in the circumstances."

She said the project would create thousands of jobs and contribute billions of dollars to the economy.

The province of British Columbia also issued an environmental certificate for the export terminal on Wednesday, listing 24 conditions, including monitoring its environmental impact and ongoing consultation with aboriginal people and local communities.

"Receiving both provincial and federal approval of our Environmental Assessment is a critical milestone on our path to making a final investment decision," LNG Canada chief executive Andy Calitz said in a statement.

Calitz added the company will continue to work to mitigate the environmental effects and enhance the benefits of the LNG Canada project.

Shell and its partners are expected to make their final go or no-go decision on the project in 2016, with construction of the first phase set to take roughly five years.

The development, located in the northern British Columbia town of Kitimat, is anticipated to cost between C$25 billion ($20.4 billion) and C$40 billion ($32.7 billion).

libtard Sep 3, 2015 9:42 AM

Louisiana changing the LNG market in North America while BC sits idol.

SOSS Dec 16, 2015 7:18 AM

Sure a lot of eggs in this LNG basket.


Quake caused by fracking

The British Columbia Oil and Gas Commission has confirmed that fracking caused a 4.6-magnitude earthquake in August — the largest linked to the industry in the province to date.

The commission says an investigation has determined that the Aug. 17 quake in northeastern B.C. was caused by fluid injection from hydraulic fracturing, also known as fracking.

It says 4.6-magnitude seismic events typically cause brief shaking felt at the surface but aren't a risk to public or environmental safety.

Progress Energy, which is owned by Malaysia's Petronas and would supply gas to the planned Pacific NorthWest LNG terminal, paused its operations after the quake struck about 114 kilometres outside of Fort St. John.

The company held the previous record for the largest known fracking-caused quake in B.C. with a 4.4-magnitude tremor in 2014.

A statement from Progress Energy says it takes the incident very seriously and it has 17 monitoring stations in its operating area to accurately detect seismic activity.

ssiguy Dec 16, 2015 8:02 AM

Natural gas prices are plunging and inventory worldwide is soaring. There is a shortage of tankers but not due to high demand but rather due to low demand.........there is such a back log in China and Europe that all the land storage depots are full and the tankers don't have anywhere to drop off their product.

Unlike gas, it is expected that prices will continue to fall and won't recover till at least 2020. Demand is expected to rise but production much faster.

BC seems to have joined the game a bit late.

city-dweller Dec 17, 2015 3:05 AM

I would see the timing perfect for construction. How long will it take to get the feeder pipeline and the terminal built?

In Paris China and India both said they wanted to increase Natural Gas usage in exchange for coal. There biggest limitation is domestic infrastructure. Once they build out more network in the next few years that is when the market will take off.

I may be bullish on this market, but I say build and invest while prices are low. Experts, materials, and labour will be cheaper now then when the market takes off in the next decade.

jawagord Dec 19, 2015 2:54 PM


Originally Posted by city-dweller (Post 7273112)
I would see the timing perfect for construction. How long will it take to get the feeder pipeline and the terminal built?

In Paris China and India both said they wanted to increase Natural Gas usage in exchange for coal. There biggest limitation is domestic infrastructure. Once they build out more network in the next few years that is when the market will take off.

I may be bullish on this market, but I say build and invest while prices are low. Experts, materials, and labour will be cheaper now then when the market takes off in the next decade.

If you have the time to watch past the introductions this presentation on LNG market is very interesting; mentions briefly Canada's prospects (Petronas consortium of national gas companies less influenced by profitability, Shell takes long time engineering, Chevron less interested in US production), the current over supply, the future demand (China India slow growth, Japan Korea declining), whose long term contracts are up for renewal (Japan), whose going to be supplying, etc, lots of take aways for those who are interested in a more global discussion.

Stingray2004 Dec 20, 2015 12:49 AM


Originally Posted by city-dweller (Post 7273112)
I would see the timing perfect for construction. How long will it take to get the feeder pipeline and the terminal built?

In Paris China and India both said they wanted to increase Natural Gas usage in exchange for coal. There biggest limitation is domestic infrastructure. Once they build out more network in the next few years that is when the market will take off.

I may be bullish on this market, but I say build and invest while prices are low. Experts, materials, and labour will be cheaper now then when the market takes off in the next decade.

Interesting take. Virtually all of the LNG terminals constructed in Australia have seen massive cost blow-outs up to the 30% - 40% range due to scarcity of skilled labour. That has spooked many LNG proponents as a result with their negative Australian experiences.

One, if not the key, factor here in BC has been "labour, labour, labour". Just one proposal (Petronas, for example) would see roughly 4,000 - 5,000 at peak construction just for the LNG terminal - which requires ~5 years for build-out.

And the nat gas mainline from NE BC to the coast would also take several years with another roughly 1,500 - 2,000 at peak construction.

Add in the additional labour force required in NE BC for the North Montney Mainline pipeline, field pipeline gathering systems, new/expanded natural gas processing plants, and of course a continuous drilling program and we are talking 1,000's more.

Again, just one of these LNG facilities has massive requirements for a skilled workforce.

If 2 LNG proposals proceed at the same time (read Petronas/Shell) the labour force requirements virtually double.

Unfortunate for Alberta in terms of major lay-offs in the Alberta energy sector. Fortuitously for the LNG proponents, though they now have access to a large skilled labour force pool in AB as a result.

Undoubtedly, this factor is an important component in terms of FIDs.

Denscity Jan 7, 2016 4:19 AM

Lng Canada which is led by Shell got their permit today to build a huge facility in Kitimat.

Stingray2004 Jan 7, 2016 7:35 AM


Originally Posted by Denscity (Post 7290693)
Lng Canada which is led by Shell got their permit today to build a huge facility in Kitimat.

I believe that ya are referring to the BC Oil and Gas Commission permit issued thereto. Frankly, it's just one of the final anticipated regulatory permits. Has nothing to do with any FID - "Final Investment Decision" by the proponents to move forward "absolument".

That said, from all indications, the Royal Dutch Shell Consortium will proceed with FID by June, 2016. The Petronas consortium had already granted FID back in June, 2015 subject to final Project Development Agreement with BC (already granted) as well as final CEAA enviro certification.

Final CEAA enviro certification for the Petronas consortium (anticipated back in mid-2015) has already dragged on due to too many "stopped clocks" over 3 years in the fed regulatory "365-clock" review approval process. And, yep, these guys (Petronas et al) are anxious to move forward as they have already expended roughly $17 billion, to date, including upstream drilling in order to confirm nat gas reserves in the NE BC Montney NG basin.

Further to Petronas' CEAA enviro certification and the "stopped clock". IMHO, the most knowledgeable fella in the MSM on LNG here in BC is Brent Jang from the G & M. We have both communicated with each other via DM over the past year+ and our latest personal communication concerned Petronas' CEAA "stopped clock", which subsequently resulted in Brent Jang writing this article:

And we both concurred that the final CEAA subject will be removed thereto by mid-March, 2016. Keep watch for that date.

As for the Royal Dutch Shell LNG consortium.. watch out for June, 2016 for their FID.

In that vein, a recent interesting BIV article corroborating same in terms of both Petronas and Royal Dutch Shell LNG consortiums:


Energy Outlook 2016: The $80 Billion Energy Question

Final investment decisions are expected in 2016 on two LNG projects that would bring billions of dollars worth of investment into B.C.

Jan. 5, 2016
Mining & Energy
By Nelson Bennett

This could be a watershed year for the energy sector and the economy in B.C.

It is a year when critical decisions are expected on tens of billions of dollars’ worth of major oil and gas projects, including the Trans Mountain pipeline expansion.

It’s also the year when Shell and Petronas are expected to pull the trigger on final investment decisions on two large liquefied natural gas projects that, combined, would result in an $80 billion investment.

And on the electricity front, construction of the $8.3 billion Site C will begin in earnest.

Combined, the Site C dam, Trans Mountain pipeline and two large LNG projects represent about $90 billion worth of investment in energy over a period of about eight years.

Denscity Jan 7, 2016 3:09 PM

^^^ Ya I shouda said A permit not The permit.

Stingray2004 Jan 8, 2016 11:52 PM


Originally Posted by Denscity (Post 7290984)
^^^ Ya I shouda said A permit not The permit.

On that note, the NEB just granted a 40-year export permit to the same Royal Dutch Shell LNG consortium - up from the previous 25-year export permit - which improves the economics considerably.

And that same new NEB export permit has a stipulation that LNG production must commence by 2022 - fits into the time frame of a ~5-year build-out commencing later this year.

On that same note, this tidbit from a U.S. publication today:


LNG Canada CEO Andy Calitz said the project would improve its competitiveness, and position it better against international rivals. Shell is expecting the export from the terminal to stand at around 3.7 billion cubic feet LNG per day, and 1.34 trillion cubic feet annually.

LNG Canada terminal construction will take almost 5 years, and cost around US$28 billion or CAD$40 billion. The plant will become capable of producing and exporting liquid natural gas by 2022. Mr. Calitz said the company will take the decision on whether to proceed with the construction of the facility, later this year.
Edited to Add: As I have repeated numerous times here before, the only hold-up for the Petronas LNG consortium is their fed CEAA enviro certification, which has dragged on and on due to the numerous "stopped clocks" on the "365-day" process over past few years. In that vein, my pal at G & M, Brent Jang, wrote this today, further corroborating a likely March, 2016 finalization of same:


Pacific NorthWest LNG Project Poised To Begin Despite Abundant Supply
VANCOUVER — The Globe and Mail
Published Friday, Jan. 08, 2016 8:12PM EST

Michael Culbert is heartened when he ponders the prospects for exporting liquefied natural gas from Canada, despite a global glut of LNG that could last years.

Mr. Culbert, president of Pacific NorthWest LNG, acknowledges the challenges in the short term of making plans to build an export terminal on British Columbia’s north coast. He is hoping for approval from the Canadian Environmental Assessment Agency (CEAA), a decision that would allow the consortium to start constructing an $11.4-billion terminal on Lelu Island in the port of Prince Rupert. If construction begins in mid-2016, it will likely take four to five years to complete the facility, so exports might flow in 2020 or 2021.

But Mr. Culbert believes the consortium will find a sweet spot as early as 2020, since the venture’s co-owners are financial backers and also “off-take partners” – long-term buyers of LNG in Asia. “Placing this LNG into the market in the 2020 to 2021 time frame is extremely important,” he said in an interview. “Time is of the essence, time is important to our project. We’ve positioned ourselves to be shovel-ready once we get the decision from CEAA.”

[underlined emphasis added]

Stingray2004 Jan 20, 2016 2:58 AM

Just an interesting note. The Petronas LNG consortium granted FID last June subject to their receipt of final enviro certification from CEAA. And they have been waiting... and waiting... and waiting.

Well, finally the positive news that they have been waiting for...


B.C. LNG project poses low risk to environment, federal scientists say
VANCOUVER — The Globe and Mail
Published Sunday, Jan. 17, 2016 10:30PM EST

Federal scientists say a proposal to export liquefied natural gas from British Columbia poses a low risk to the environment, a crucial ruling that sides with Pacific NorthWest LNG’s contention that its project won’t ruin an ecologically sensitive site.

The consortium led by Malaysia’s state-owned Petronas wants to build an $11.4-billion terminal on Lelu Island, which is located next to Flora Bank – a sandy area with eelgrass that nurtures juvenile salmon.

Pacific NorthWest has devised plans to construct a suspension bridge and pier that would carry a pipeline from Lelu Island to a dock for loading tankers, which would deliver the fuel to Asia.

“The effects of the marine structure on fish and fish habitat have been categorized as having a low potential of resulting in significant adverse effects,” Fisheries and Oceans Canada said in a letter last week to the Canadian Environmental Assessment Agency (CEAA).

The agency is expected to render a final decision by the spring on the controversial project. Its review started in April, 2013, but encountered a series of delays as the regulator asked the consortium for more information.

Fisheries and Oceans Canada, commonly referred to as DFO because it was formerly called the Department of Fisheries and Oceans, outlines recommendations to reduce the risk of damaging Flora Bank. Those include monitoring eelgrass beds to ensure the area remains stable and revising construction methods for the bridge and pier because porpoises are sensitive to underwater noise.

The federal scientists conclude that Pacific NorthWest’s plans to protect Flora Bank are reasonable, as long as the venture’s backers introduce a long-term monitoring program, implement measures to mitigate harm to fish habitat and adhere to a series of other recommendations to protect the Skeena River estuary.

“DFO would like to acknowledge the effort and commitment of the proponent to undertake a robust and science-based 3D modelling exercise to assist in predicting effects to habitat in and around the project, including Flora Bank,” DFO said in its letter.

Natural Resources Canada agreed with DFO, in a letter last week to the CEAA, that the consortium’s scientific studies into Flora Bank’s sediment patterns have been rigorous, adding that it “has confidence in the proponent’s conclusions.”

The federal department said in a separate document that the impact of the proposed trestle-supported pier and dock will be “localized, resulting in a low risk to commercial, recreation and aboriginal fisheries.”

jawagord Jan 20, 2016 4:56 AM

Petronas plans cuts and review to counter oil price slump
I suppose they are making these cuts to finance Pacific Northwest LNG, 11.4 billion sounds familiar?

Petroleum Nasional Bhd (Petronas) plans to cut spending by up to 50 billion ringgit ($11.4 billion) over the next four years and review its business structure in response to the profit-sapping slump in oil prices.

The state-owned Malaysian company brings in nearly half of the Southeast Asian country's oil revenue and its woes are bound to add pressure to an economy already reeling from a slide in the ringgit and political uncertainty after a scandal surrounding state investor 1Malaysia Development Bhd (1MDB).

Petronas made its announcement on spending cuts in an internal memo, a copy of which was seen by Reuters.

"We will go through another round of CAPEX (capital expenditure) and OPEX (operating expenditure) review to target cuts up to RM50 billion over the next four years. This means that we are going to have to defer some of our projects," CEO Wan Zulkiflee Wan Ariffin said in the memo dated Monday.

Stingray2004 Jan 21, 2016 3:20 AM


Need to understand the entire context:

1. Over the next 5 years Petronas has US$80 billion in capex planned globally;

2. Petronas intends to reduce both capex AND opex by up to US$11.4 billion over the next 4 years;

Sooooo.... Petronas capex is reduced to ~US$68 billion or so.

And yes, Petronas considers the proposed PNW LNG facility a high priority in its planned capex.

They have already expended ~$17 billion to date: (Progress Energy purchase, additional natural gas assets, proving up reserves.) That's big coin.

Now let's look at additional capex involved in the project:

1. North Montney Mainline - $1 billion but TransCanada Pipeline capex - not Petronas;

2. Coast connector pipeline- ~$6 billion but TransCanada Pipeline capex - not Petronas;

3. Upstream natural gas processing facilities - not Petronas capex;

4. $12 billion LNG facility - Petronas only responsible for its portion of capex, which is around 60% of that figure. The remaining consortium partners (who are also off-take buyers) responsible for rest.

So highly doubtful what ya are insinuating. ;)

craneSpotter Jan 27, 2016 9:00 PM

Well this seems like a positive sign with regard PNW LNG:

Petronas taking two floors at Park Place tower

BIV - Jan 26, 2016


Petronas, the Malaysian oil and gas giant behind a planned multibillion-dollar liquefied natural gas plant in Prince Rupert, is increasing its footprint in downtown Vancouver.

Pacific NorthWest LNG, a consortium led by Petronas, confirmed that it has leased two floors of office space at the 35-storey Park Place tower at 666 Burrard Street. That gives the company a total of 34,000 square feet.

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