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-   -   Proposed West Coast BC LNG Terminals (https://skyscraperpage.com/forum//showthread.php?t=201424)

craneSpotter Sep 5, 2014 5:45 PM

Quote:

Originally Posted by Xelebes (Post 6714793)
I would most certainly assume that the carbon tax operates like the sales tax and not the income tax. It is most certainly based on the location of emission, not where the mind and management is located. Phew! Those four tax courses were fun.

True. Pretty much all the proposals have the LNG companies set up with HQ's in Vancouver (or BC) - for example Pacific Northwest LNG. The LNG projects are partnerships made up of of several global energy firms, so they are independently incorporated entities. I have a neighbour in Victoria that is a Vice-President at one such LNG company, with the HQ in Vancouver.

They do, however, generally have legal counsel in Calgary for the application process due to the location of the National Energy board office. Plus the Calgary based pipeline and gas companies will get a boost from any LNG plants built in BC. I understand that most of the fabrication of plant parts (pipes/vessels etc) will come from overseas or North Vancouver.

craneSpotter Sep 5, 2014 5:49 PM

Yet another proposal --

Texas-based company seeks B.C. LNG export licence

BRENT JANG,
VANCOUVER — The Globe and Mail - Thursday, Sep. 04 2014

Quote:

A Texas-based company is the latest entrant to seek a 25-year licence to export liquefied natural gas (LNG) from British Columbia.

Orca LNG Ltd., the Canadian affiliate of an energy firm based in Cypress, Tex., wants to build an LNG export terminal near Prince Rupert in northwestern British Columbia....


...Orca filed its application Thursday to the National Energy Board, requesting permission to export up to 24 million tonnes a year of LNG – capacity that would rank it among the largest players in the B.C. LNG race....


...Last week, a Haisla-owned project called Cedar LNG Export Development Inc. filed three applications for LNG export licences.

With the emergence of Cedar LNG and Orca LNG, there are now 17 B.C. LNG projects proposed so far, though industry experts say only four at most will come to fruition. Two LNG export terminals are also envisaged for Oregon.

craneSpotter Sep 5, 2014 5:53 PM

Interesting.

Hawaiian deal shows possibilities for Canadian LNG as crunch time nears

Financial Post - Sep 4, 2014

Quote:

Canadian liquefied natural gas may soon be lighting up Hawaii, if plans to ship the super-chilled gas to the Pacific island state come to fruition...

As 16 LNG consortiums consider investments on the West Coast, Vancouver, B.C. based FortisBC Energy Inc. is expected to beat the traffic and start supplying LNG to Hawaiian Electric Co. under a 15-year agreement starting mid-2017, subject to regulatory approvals..

While small, the Hawaii deal underscores the breadth of possibilities and untapped markets for Canadian natural gas....

Hawaiian Electric has agreed to purchase about 800,000 tonnes per year for the first five years, 700,000 tonnes for the next five years and 600,000 tonnes per year for the last five years, at a price of $12-$13 per million British thermal units.

Stingray2004 Sep 6, 2014 10:12 PM

Quote:

Originally Posted by craneSpotter (Post 6676349)
Apache Corp., under investor pressure, exiting Kitimat LNG project

Remember that originally Kitimat LNG comprised Encana, EOG Resources, and Apache as sole proponents. They are all natural gas producers in NA yet the LNG industry basically comprises the global energy giants. A different ballgame. With Chevron previously purchasing the interests of Encana/EOG, not too surprised that Apache is now bowing out.

Interesting that major LNG producer, Australia's Woodside Petroleum, was mentioned as a possible purchaser of Apache's interest in the Sydney Morning Herald a few weeks ago.

Kinda makes sense since Kitimat LNG has upstream resources in NE BC's Liard Basin, has ALL regulatory approvals in place (NEB export permit, Environmental Assessment Certificate, pipeline approval, etc. etc.) Basically a ready to go project subject to completion of long-term sales agreements.

Australia's Woodside Petroleum already has an option to purchase site on Grassy Point north of Prince Rupert for an LNG facility and already has held a public open house on their conceptual LNG plans. Problem is that all regulatory approvals can take a few years, they have no upstream NG assets to source from, and they are basically starting from scratch.

Ergo, Apache's interest in Kitimat LNG makes a much better fit for them. Wouldn't be surprised to see them purchase that stake as an alternative.

As an aside, interesting to note (reported this week) that Fortis BC has just signed a long-term, 15-year, LNG supply agreement with Hawaiian Electric Co. - likely to be sourced from their Delta LNG facility currently undergoing major expansion.

Stingray2004 Sep 6, 2014 10:32 PM

Quote:

Originally Posted by Doug (Post 6677742)
BC missed the window on LNG. Australia is already exporting and has many more projects in various stages of development.

Not correct contextually. Australia has proven to be the highest cost LNG producer in the world. Major cost blowouts from Gorgon LNG to Wheatstone LNG, etc. etc. Capital costs per installed million ton LNG capacity are 2 - 3 times what are projected along northwest BC's coast.

Any additional brownfield projects (adding additional capacity or liquefaction trains) to existing Aussie LNG facilities are basically dead. To wit, Australia's Woodside Petroleum, a major Aussie LNG producer, is now looking at NE BC's coast for their next generation of LNG production. Woodside's proposed Browse LNG in Australia has become just too expensive and not economically viable.

Quote:

Originally Posted by Doug (Post 6677750)
Next to no resource development will occur until the land claims stalemate resolves itself.

Well, almost all FNs in northern BC have equity interests in proposed NG pipelines from NE BC to the coast as well as the LNG terminals on the west coast themselves. Ergo, they have already "bought-in" and consented to same.

Completely different story regarding the proposed Northern Gateway pipeline to transport bitumen from AB to the NE BC coast. This greenfield project has spooked most FNs (emotionally) about potential bitumen spills along salmon-bearing rivers and the coast.

In that vein, interesting to see a spokesperson for Kinder Morgan's proposed twinning of their Trans-Mountain pipeline to the SW coast on the local 6 pm news last night. According to her, all BC FNs along the route, except one, has already signed on as equity participants. Perhaps that is due to the fact that the Trans-Mountain pipeline already exists along the corridor.

libtard Sep 7, 2014 1:49 AM

Quote:

Originally Posted by Stingray2004 (Post 6719767)
Not correct contextually. Australia has proven to be the highest cost LNG producer in the world. Major cost blowouts from Gorgon LNG to Wheatstone LNG, etc. etc. Capital costs per installed million ton LNG capacity are 2 - 3 times what are projected along northwest BC's coast.

Any additional brownfield projects (adding additional capacity or liquefaction trains) to existing Aussie LNG facilities are basically dead. To wit, Australia's Woodside Petroleum, a major Aussie LNG producer, is now looking at NE BC's coast for their next generation of LNG production. Woodside's proposed Browse LNG in Australia has become just too expensive and not economically viable.



Well, almost all FNs in northern BC have equity interests in proposed NG pipelines from NE BC to the coast as well as the LNG terminals on the west coast themselves. Ergo, they have already "bought-in" and consented to same.

Completely different story regarding the proposed Northern Gateway pipeline to transport bitumen from AB to the NE BC coast. This greenfield project has spooked most FNs (emotionally) about potential bitumen spills along salmon-bearing rivers and the coast.

In that vein, interesting to see a spokesperson for Kinder Morgan's proposed twinning of their Trans-Mountain pipeline to the SW coast on the local 6 pm news last night. According to her, all BC FNs along the route, except one, has already signed on as equity participants. Perhaps that is due to the fact that the Trans-Mountain pipeline already exists along the corridor.

Apparently Kind Morgan's twinned pipeline would have a capacity of 890,000 barrels of oil per day, almost tripling production. I am much more in favor of this project than the Northern Gateway. Would all that increase in capacity be shipped by boat? Or would refineries in Burnaby and WA state see more product. And would lower prices on gas in the northwest be a side effect?

Stingray2004 Sep 7, 2014 9:49 AM

Quote:

Originally Posted by libtard (Post 6719930)
Apparently Kind Morgan's twinned pipeline would have a capacity of 890,000 barrels of oil per day, almost tripling production. I am much more in favor of this project than the Northern Gateway. Would all that increase in capacity be shipped by boat? Or would refineries in Burnaby and WA state see more product. And would lower prices on gas in the northwest be a side effect?

First thing to note is that the Trans-Mountain pipeline is already over-subscribed every month by 60% - 70% over the past few years. IOW, too many sellers/buyers and not enough capacity.

The Trans-Mountain pipeline also has a branch pipeline extending south from Sumas, BC across the US border into WA State and the Cherry Point refinery. BTW, Cherry Point refinery sends jet fuel, etc. back across the border to YVR, etc. As an aside, I can see the Cherry Point refinery, at a very far distance, from my backyard.

Cherry Point refinery has been supplied by Alaskan crude super tankers for 37 years since 1977. Same crude oil tankers that ply the waters past the west coast of Van Isle, right past Victoria, thru the Juan de Fuca Strait, and past the Gulf Islands. No murmur whatsoever.

US subscription of the Trans-Mountain pipeline has also increased as a result of dwindling supply/reserves from Valdez, Alaska.

So much so that the Chevron refinery in Burnaby recently issued a complaint to the NEB vis-a-vis their long-term sourcing rights to no avail. The Chevron refinery now sources a good chunk of its crude via CN/CP rail tanker trains along the Fraser Canyon/Fraser River from AB as well as the Bakken Basin in North Dakota.

In fact, this past Thursday morning, at 11 am, I was having breakfast at an outdoor bistro along White Rock beach. A 110-unit tanker car train passed during the interim - obviously an oil train from the Bakken in North Dakota likely headed to Chevron's Burnaby refinery (which has previously been conformed by a Burlington Northern/Santa Fe spokesperson. That refinery is not equipped to refine heavy oil/bitumen BTW.

Remember that the Trans-Mountain pipeline is a unique "batched" pipeline permitting refined products right up to bitumen (yes even bitumen) passing through today.

OTOH, the WA State Cherry Point refinery is able to refine heavy oil/bitumen as well as the California coast refineries - currently dependent on Alaskan crude.

Ergo, most of the expanded capacity of the Trans-Mountain pipeline will make its way across the border into WA State as well shipped to the Cali refineries. Of course, another chunk of bitumen will also be shipped to Asia - China in particular.

Even with all of the local/US/offshore oil/bitumen demand, dunno if Kinder Morgan's increased capacity will impact prices here. Would hope so, of course.

craneSpotter Sep 10, 2014 6:46 PM

Looks like Petronas is trying to push ahead faster.

Progress Energy says it’s disappointed with pace of LNG regulatory process

Financial Post, Sep 9, 2014 - http://business.financialpost.com/20..._lsa=4a14-468b

Quote:

Pacific North West, a unit of Petronas and its partners created to develop the LNG project on Lelu island, B.C. is also entangled in federal and provincial environmental assessment. The regulatory process is “moving along, although we are little disappointed with the pace of the regulatory process on that front as well,” Mr. Culbert said.

Petronas and other proponents looking to build LNG have been pushing the B.C. government to improve its fiscal regime as they come close to deciding on their projects. The Malaysian company also signed a letter with the B.C. government this year seeking “certainty” on costs.

Stingray2004 Sep 11, 2014 6:57 AM

Key tidbit coming from that article:

Quote:

The company spent $2.4-billion last year, and is investing another $2.8-billion to prove up its natural gas reserves in British Columbia as it prepares to take a decision on the project.
That's $5.2 billion just to prove up reserves. Not exactly pocket change. ;)

MalcolmTucker Sep 11, 2014 3:14 PM

Yeah, it is important. But it is also important to be able to push stranded assets over the side in the event they pull out. Win - win for them.

craneSpotter Sep 19, 2014 8:52 PM

Looks like they need the Feds and BC to step up prior to FID. Well Harper?

What ramifications could there be (thinking within the Canadian oil industry) to have LNG plants recognized federally as manufacturing plants - for the associated tax breaks?

Petronas still eyeing year end for Canada LNG investment decision

The Star - September 19, 2014

Quote:

VANCOUVER: Pacific NorthWest LNG, a unit of Malaysia's Petronas, still plans to make a final decision on the construction of a liquefied natural gas (LNG) facility in northwest British Columbia by year end, the unit's president said on Thursday...

...British Columbia's ruling Liberals have promised to release the details of its LNG-taxation scheme by November.

"We do feel there's a commitment to get this done to allow us to hit our final investment decision, but it cannot be an open-ended risk," said Kist. "We will not FID without that being nailed down."

He added that other outstanding fiscal issues, including a push by a consortium of B.C. LNG developers to be recognised federally as manufacturing operations to gain tax breaks, will also play into the company's final decision.

Pacific NorthWest will also need to have provincial and federal environmental approvals in hand before the FID can be made, Kist said, though he declined to comment on a "Plan B" if regulatory approval has not been granted by year end.

lubicon Sep 19, 2014 11:05 PM

Quote:

Originally Posted by craneSpotter (Post 6736651)
Looks like they need the Feds and BC to step up prior to FID. Well Harper?

What ramifications could there be (thinking within the Canadian oil industry) to have LNG plants recognized federally as manufacturing plants - for the associated tax breaks?

Petronas still eyeing year end for Canada LNG investment decision

The Star - September 19, 2014

I would think that other refineries, upgraders, and similar processing plants would be expected to be treated in the same fashion. Maybe they are now - I honestly don't know.

Stingray2004 Sep 20, 2014 1:14 AM

Natural gas processing plants, situate in the natural gas basins to remove impurities, already have the capital cost allowance classification that the nascent LNG industry is seeking.

craneSpotter Sep 20, 2014 9:41 PM

Quote:

Originally Posted by Stingray2004 (Post 6736961)
Natural gas processing plants, situate in the natural gas basins to remove impurities, already have the capital cost allowance classification that the nascent LNG industry is seeking.

Ok, thanks!

MalcolmTucker Sep 21, 2014 2:48 AM

The big problem is this goes against the G8 pledge to eliminate oil and gas subsidies, though if you expect the businesses to last 30 years, you are just delaying your revenue, not eliminating it (though future money is worth less than current money). If this is put in place, the oil sands companies could sue and may rightly win the return of accelerated capital cost allowances (put in place under the Liberals in 1997, eliminated under Harper).

craneSpotter Sep 25, 2014 4:41 PM

oh, playing hardball now. Gimmie Gimmie or else.

Petronas threatens to ‘call off’ $10-billion B.C. LNG project: report

Globe and Mail - Sep 25, 2014

Quote:

Malaysia’s state-owned oil-and-gas giant Petronas is threatening to cancel a $10-billion (U.S.) liquefied natural gas project in British Columbia, according to a news report.

Petronas chief executive officer Shamsul Abbas told the Financial Times in an interview that he is “ready to call off” the Pacific NorthWest LNG project amid a delayed regulatory approval process, plans by the B.C. government to impose an LNG tax and a “lack of appropriate incentives.”
http://www.theglobeandmail.com/repor...ticle20783049/

MalcolmTucker Sep 25, 2014 4:50 PM

Well it makes sense.

They can produce in BC, ship to the states, and ship out via an LNG plant with massive local incentives and no extra taxes.

Why would they pay an extra tax in BC?

craneSpotter Sep 25, 2014 9:00 PM

and right on the heels.... both sides using the media to help negotiate. I'm guessing Petronas and BC are close to a deal now, and suspect Petronas will know exactly what tax (and breaks/incentives/subsidies, whatever you like t call them) will be in place for the LNG industry here before the government announcement in October - they will set the bar.

I have heard from insiders (pretty good source) that one of the 'medium' sized plants now has financing in place and will get the green light by Jan 2015. The only problem may be if there is a continued downward spiral in oil prices, which could result in pressure to lower Asian gas prices. But oil is not expected to go much below $90 (WTI). Also, Asian demand for gas is expected to continue to increase as forecast over the next 20-30 years, so the energy is needed one way or another. As long as BC gets gas royalties at least, all is pretty good :)

B.C. downplays reports Petronas may ‘call off’ gas project

Globe and Mail, Sep 25, 2014

Quote:

“I know what’s going on at the table and I know there’s good progress,” Mr. Coleman said at the annual convention of the Union of B.C. Municipalities, in Whistler, B.C. He was taking a break from of the business of the UBCM to deal with the fallout from the report.

Mr. Coleman said the Financial Times report prompted him to call Petronas today, and when he did he was told, “Our negotiations are going fine.” He declined to say, exactly, to whom he spoke, citing the need to maintain the confidentiality of talks.

Asked if the comments could be a negotiating tactic, Mr. Coleman replied, “It could be. That could be fine. We’re all big boys at the negotiating table.”
http://www.theglobeandmail.com/repor...ticle20783049/

craneSpotter Sep 25, 2014 9:43 PM

and even more, from our Premier no less:

B.C. premier not concerned about Petronas threat to pull out of $10-billion LNG project

Quote:

...Clark said she's confident Petronas won't pull out, and that the company was simply bargaining in public.

"We're negotiating and this is part of negotiations," Clark said at a meeting with Chinese delegates from Guangdong province in Vancouver on Thursday. "What Petronas is doing is standing up and trying to get the absolute best deal they can get for their shareholders . . . and we're trying to get the best deal for British Columbians. That's the process."

Abbas is expected to visit Canada later this week...
http://www.vancouversun.com/news/pre...#ixzz3EMlAA0Vl

Stingray2004 Sep 26, 2014 2:22 AM

A bit of insight here.

Petronas has been quite aggressive with its proposed west coast LNG terminal.

So far:

1. $6 billion purchase of Progress Energy (NE BC Montney basin);

2. Later $1.4 billion purchase from Talisman of additional Montney basin lands;

3. ~$4 billion spent over past 2 years drilling/proving up reserves;

4. ~$500 million for engineering/legal etc. inclusive of 3 separate engineering proposals for LNG terminal;

Total invested to date: ~$12 billion.

And, more importantly, the equity/off-take agreements:

1. Japex - 10% (inclusive of LNG off-take);

2. PetroleumBRUNEI - 3%;

3. Indian Oil - 10%;

4. Sinopec - 15% (plus additional 3 MTPA off-take on top of 15%)

If Petronas had their environmental assessment certificate issued yesterday, they would have already made their FID. And therein lies the problem. The BC EAO will complete its review by October 19, 2014. And then a few weeks for the BC minister to review and sign-off thereafter.

Also of importance is the EAO assessment of the connecting $5 billion NG pipeline by TransCanada Pipeline. Their environment certificate might not be issued until the end of the year.

The BC legislature also commences sitting on October 6, 2014 in order to pass legislation for the proposed LNG tax regime. Petronas has been aware, for a considerable period of time, the proposed taxation regime.

Petronas has also been working feverishly, behind the scenes, on all of these matters in order to have all their ducks in a row for the anticipated December, 2014 FID. Problem is that regulatory delays might mean the FID will be in January/February 2015 and Petronas' head office is frustrated. That's it in a
nutshell.


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