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

craneSpotter Oct 29, 2014 5:45 PM

I think BG will probably wait to see if Petronas is going ahead...

BG Group pressing pause button on Prince Rupert LNG, citing market conditions

Vancouver Sun, Oct 29, 2014
http://www.vancouversun.com/business..._lsa=ce60-ff9d

Quote:

CALGARY - The chairman of British energy firm BG Group says it's hitting the pause button on its proposed liquefied natural gas project near Prince Rupert.

On a conference call to discuss BG's third-quarter results, interim executive chairman Andrew Gould says the company isn't abandoning the project.

But he says there's a risk the market will be well supplied past 2020, so BG is waiting to see how conditions evolve.

craneSpotter Nov 3, 2014 9:22 PM

B.C.'s LNG tax moves buoy Chevron’s interest

Globe & Mail , Vancouver, Nov 3, 2014 - http://www.theglobeandmail.com/repor...ticle21420331/

Quote:

Chevron Corp. has welcomed the B.C. government’s plan to lighten the tax load on liquefied natural gas projects as the U.S. energy giant seeks Asian customers for Canadian LNG....

...San Ramon, Calif.-based Chevron, which reported Friday that its third-quarter profit rose 13 per cent to $5.59-billion (U.S.), is welcoming the revised tax regime.

“I think that what we are satisfied with is that the British Columbia government is very attentive to the realities of the industry. They’ve listened to what we have said, they’ve listened to what the buyers have said, and I think they made some very good moves in terms of what reality is out there and what it takes to make these projects economic,” said Jeff Shellebarger, president of Chevron North America Exploration and Production Co.

The Canadian units of Chevron and Houston-based Apache Corp. each own 50 per cent of Kitimat LNG, but Apache said in July that it will exit the joint venture.

“Apache has announced their intent to fully exit the project. We’re still committed to this project,” Mr. Shellebarger said during a conference call with industry analysts.

He cautioned that Chevron won’t make a final investment decision until buyers have been secured to accept LNG deliveries from Kitimat in northwestern British Columbia. Chevron wants to sign up long-term Asian customers for at least 60 per cent of Kitimat LNG’s production.

lubicon Nov 4, 2014 7:19 PM

That's definitely good news, now all Chevron needs to do is find a buyer for Apache's stake.

milomilo Nov 4, 2014 7:42 PM

Where is all this natural gas going to come from? All the articles focus on the port facilities, but is large scale drilling (and fracking?) going to be neccesary also? Does the gas extraction rely on the LNG facilities being built?

Aside from that, I hope this goes through. Not only for BC's economy, but I'd imagine LNG producers will be supporters of the Northern Gateway - the pipeline will be mutually beneficial.

MalcolmTucker Nov 4, 2014 8:16 PM

Gas to come from shale from BC NE for the most part, depending on seasonality maybe Alberta (depends if there is geology to support a cheap storage site in BC).

milomilo Nov 4, 2014 8:27 PM

Quote:

Originally Posted by MalcolmTucker (Post 6794809)
Gas to come from shale from BC NE for the most part, depending on seasonality maybe Alberta (depends if there is geology to support a cheap storage site in BC).

That would probably be good news for Alberta then - I'd imagine most of that work would be based out of Grande Prairie, at least initially.

MalcolmTucker Nov 4, 2014 9:09 PM

Quote:

Originally Posted by milomilo (Post 6794830)
That would probably be good news for Alberta then - I'd imagine most of that work would be based out of Grande Prairie, at least initially.

Fort St. John. Most of the back office work, geology, financing, and engineering is Alberta though.

logan5 Nov 5, 2014 1:00 AM

Quote:

Originally Posted by lubicon (Post 6778556)
I doubt that will happen. Their defacto HQ is in Calgary now and I don't see that changing.

That would be a slap in the face to British Columbia. Extract natural gas in NE BC, run the gas through pipelines in BC, then ship it from the west coast of BC, while the high paying corporate jobs are in Calgary. I hope the provincial government will be putting pressure on Petronas and others to have a large corporate presence in Vancouver. We're giving them a nice tax break only to have them outsource jobs to Alberta?

craneSpotter Nov 5, 2014 8:41 AM

Quote:

Originally Posted by logan5 (Post 6795214)
That would be a slap in the face to British Columbia. Extract natural gas in NE BC, run the gas through pipelines in BC, then ship it from the west coast of BC, while the high paying corporate jobs are in Calgary. I hope the provincial government will be putting pressure on Petronas and others to have a large corporate presence in Vancouver. We're giving them a nice tax break only to have them outsource jobs to Alberta?

Not to worry :)

The serious LNG proposals are all consortiums of existing foreign energy companies... some with Canadian subsidiaries. They will (or have) incorporate new LNG companies to build and operate the plants, which for the most part will be HQ'd in Vancouver. Plus much of the engineering will be done in field offices in Vancouver and on site. Another good thing is that the financing for the plants is foreign, so LNG may bring much needed foreign investment into Canada's oil/gas industry, which has softened recently.

Almost all the jobs for construction and on-going operations/administration are BC based (although expect some fabrication to take place in Asia and it is unknown how many foreign workers will be involved). The provincial government will also get a boost in revenues from increased gas royalties :)

Of course Alberta will also benefit. Alberta is the centre of the nations energy industry. Engineering, designing/building/operating pipelines, drilling and servicing thousands of wells etc... Even Toronto will benefit through the financial aspects.

Most insiders are saying 3-4 plants are likely to be built. So the groups with existing experience and expertise with LNG infrastructure, shipping, relationships with large asian buyers and financing are most likely to proceed.

I'm just not sure about all that fracking...

Here is a snippet from the Pacific Northwest LNG (owned by Petronas 62%/Sinopec 15%/JAPEX 10%/Indian Oil 10%/PetroleumBRUNEI 3%) backgrounder:

Quote:

Pacific NorthWest LNG could create significant potential for northwest B.C. What would it mean economically for the province?

• 330 local, long-term careers operating the facility. Pacific NorthWest LNG is planning a training program for local workers to become facility process operators, which comprises at least one third of the workforce needs at the LNG plant.

• Approximately 300 spinoff jobs to support facility operations in the local service sector.

• 130 careers at Pacific NorthWest LNG’s Vancouver office.

• Up to 4,500 jobs during peak construction.

– Workforce needs during construction include trades people, labourers and trades helpers, heavy equipment operators, truck drivers, engineers, managers and support staff.

• Once in operation, Pacific NorthWest LNG will contribute more than $1 billion annually to federal, provincial and municipal governments in various taxes and royalties.
– In comparison, the provincial government collected a little over $600 million in royalties from the forest industry in 2013.


MalcolmTucker Nov 5, 2014 3:51 PM

Quote:

Originally Posted by craneSpotter (Post 6795550)
Not to worry :)

The serious LNG proposals are all consortiums of existing foreign energy companies... some with Canadian subsidiaries. They will (or have) incorporate new LNG companies to build and operate the plants, which for the most part will be HQ'd in Vancouver. Plus much of the engineering will be done in field offices in Vancouver and on site. Another good thing is that the financing for the plants is foreign, so LNG may bring much needed foreign investment into Canada's oil/gas industry, which has softened recently.

Almost all the jobs for construction and on-going operations/administration are BC based (although expect some fabrication to take place in Asia and it is unknown how many foreign workers will be involved). The provincial government will also get a boost in revenues from increased gas royalties :)

Of course Alberta will also benefit. Alberta is the centre of the nations energy industry. Engineering, designing/building/operating pipelines, drilling and servicing thousands of wells etc... Even Toronto will benefit through the financial aspects.

Most insiders are saying 3-4 plants are likely to be built. So the groups with existing experience and expertise with LNG infrastructure, shipping, relationships with large asian buyers and financing are most likely to proceed.

I'm just not sure about all that fracking...

Here is a snippet from the Pacific Northwest LNG (owned by Petronas 62%/Sinopec 15%/JAPEX 10%/Indian Oil 10%/PetroleumBRUNEI 3%) backgrounder:

I guess Saskatchewan, Newfoundland, and Nova Scotia have headquarters already?

Quote:

Originally Posted by logan5 (Post 6795214)
That would be a slap in the face to British Columbia. Extract natural gas in NE BC, run the gas through pipelines in BC, then ship it from the west coast of BC, while the high paying corporate jobs are in Calgary. I hope the provincial government will be putting pressure on Petronas and others to have a large corporate presence in Vancouver. We're giving them a nice tax break only to have them outsource jobs to Alberta?

Slap in the face? How about reality. If you want to be stuck with a small number of employees, having to pay relocation to recruit every single one, isolated from their professional networks, paying them more to maintain the same quality of life in Vancouver as in their existing lives then sure.

The large corporate support system is needed on the extraction side, and those jobs are already in Calgary. The pipeline office jobs are already in Calgary (and for Enbridge, Edmonton).

Having an office in Vancouver is neither here nor there. The corporate taxes will be collected in BC no matter what.

Building an active cluster that generates substantial uplift in Vancouver isn't really in the cards. For the lower mainland, this is purely a rentier venture.

logan5 Nov 5, 2014 5:17 PM

Quote:

Originally Posted by MalcolmTucker (Post 6795797)
Slap in the face? How about reality. If you want to be stuck with a small number of employees, having to pay relocation to recruit every single one, isolated from their professional networks, paying them more to maintain the same quality of life in Vancouver as in their existing lives then sure.

The large corporate support system is needed on the extraction side, and those jobs are already in Calgary. The pipeline office jobs are already in Calgary (and for Enbridge, Edmonton).

Having an office in Vancouver is neither here nor there. The corporate taxes will be collected in BC no matter what.

Building an active cluster that generates substantial uplift in Vancouver isn't really in the cards. For the lower mainland, this is purely a rentier venture.

So the BC government won't be expecting head offices in Vancouver?

MalcolmTucker Nov 5, 2014 5:47 PM

Quote:

Originally Posted by logan5 (Post 6795946)
So the BC government won't be expecting head offices in Vancouver?

Expecting, wanting, and being able to require is very different. Even favourable tax treatment is unenforceable, you don't need much to domicile a subsidiary company. Even in 2011, when BC accounted for 75% of Progress's production the head office was in Calgary. Look at this job listing: http://www.progressenergy.com/career...s/tax-manager/ the person responsible for planning PST and Carbon Tax planning will be in Calgary.

The cluster is just too big of a gravity well. There really isn't much advantage to the province except in a few office jobs and property tax to having the headquarters.

craneSpotter Nov 5, 2014 6:43 PM

Quote:

Originally Posted by MalcolmTucker (Post 6795797)
The large corporate support system is needed on the extraction side, and those jobs are already in Calgary. The pipeline office jobs are already in Calgary (and for Enbridge, Edmonton).

Having an office in Vancouver is neither here nor there. The corporate taxes will be collected in BC no matter what.

Building an active cluster that generates substantial uplift in Vancouver isn't really in the cards. For the lower mainland, this is purely a rentier venture.

Quote:

Originally Posted by MalcolmTucker (Post 6795998)
Expecting, wanting, and being able to require is very different. Even favourable tax treatment is unenforceable, you don't need much to domicile a subsidiary company. Even in 2011, when BC accounted for 75% of Progress's production the head office was in Calgary. Look at this job listing: http://www.progressenergy.com/career...s/tax-manager/ the person responsible for planning PST and Carbon Tax planning will be in Calgary.

The cluster is just too big of a gravity well. There really isn't much advantage to the province except in a few office jobs and property tax to having the headquarters.

You are not entirely correct.

As previously mentioned - Yes, on the gas extraction/production/pipeline side the companies are already Alberta/Calgary - with most operations in the Fort St. John region - as it has been all along. But on the LNG side (new industry), the operations and administration jobs will be mostly BC/Vancouver.

Look at this job listing for a Senior Financial Analyst for Pacific Northwest LNG to be based in their Vancouver office ;)

http://pacificnorthwestlng.com/wp-co...st-Posting.pdf

Here is a BG group (UK based & partner with Spectra in another large LNG project) info sheet on their Canadian operations and contact info for their Vancouver office:

http://www.bg-group.com/229/where-we...nada/contacts/

Here is Spectra Energy (Houston based partner of BG Group for this project - http://www.spectraenergy.com/Operati...tation-System/), listing both a Vancouver and Calgary as regional offices for operations:

http://www.spectraenergy.com/Contact...ional-Offices/

Of course Chevron already has a large presence in Vancouver.

I don't think there will be a heavy corporate energy presence in Vancouver in the range of thousands and thousands like Calgary, as the subsidiaries do not require a large administrative office staff - about 130-150 as mentioned in the backgrounder for PNW. But I do understand that the CEO of Progress is relocating to Vancouver from Calgary to take over the reins at Pacific Northwest while still maintaining his role at Progress. I can see Petronas wanting to relocate their subsidiary Progress to Vancouver form Calgary eventually if the LNG plant is built, and there already is a large mining cluster there with all the geologists etc.

And yes, as you mentioned, the Lions share of gas extraction, pipeline construction/operation, LNG production & corporate activity will be in BC, so the taxes and royalties will be collected here regardless of where the HQ is, even if its mostly Texas and Asia in reality. Petronas executives from the head office are making regular trips to Vancouver and dealing directly with the BC government and regulatory agencies.

In any case, if the LNG plants are built - there will a definite impact on Vancouver on the corporate side (well over 1000 head office jobs plus spinoffs in legal and engineering, from very little LNG activity now). And Alberta will also get a boost on the gas extraction/exploration/pipeline side as it does not make sense to move (even part, other than Progress) of that cluster to Vancouver from Calgary. This could be good timing for Alberta too, with the looming slowdown in the oilsands (foreign money is drying up) and if these LNG plants get built here I'm sure we will need a few thousand workers from Alberta.

MalcolmTucker Nov 5, 2014 6:55 PM

^ That 200 employees includes the Calgary office and Fort St. John. Is there a different backgrounder you are talking about than the link?

craneSpotter Nov 5, 2014 7:43 PM

Quote:

Originally Posted by MalcolmTucker (Post 6796117)
^ That 200 employees includes the Calgary office and Fort St. John. Is there a different backgrounder you are talking about than the link?

Nope. Pacific Northwest LNG does not currently have an office, nor any jobs offered in Calgary or Fort St. John - their affiliate Progress Energy does though on the gas extraction and supply side for the LNG plant - which is a separate operation. The transmission pipeline (for PNW) is to be built and operated by Transcanada, so there will be more Alberta (and BC - as TC recently expanded its Vancouver office) jobs there - again a separate operation.

Here is the link to the backgrounder. States that 130 'careers' will be offered at PNW LNGs Vancouver office, plus 330 jobs at its Prince Rupert plant/office once in production. Should the investment decision to go go forward be approved by head office in KL. Of course there will be many spin off support jobs around both locations too.

http://pacificnorthwestlng.com/wp-co...der_V.19.0.pdf

craneSpotter Nov 5, 2014 8:05 PM

Ohhh, more signs of LNG progress! And boost for BC Hydro. This is for the (significant) ancillary power supply, not for gas compression.

BC Hydro and LNG Canada sign power deal

Nov 4 - Canadian Press - Victoria, BC
http://globalnews.ca/news/1653111/bc...gn-power-deal/


Quote:

VICTORIA – The backers of a proposed liquefied natural gas export plant in Kitimat, B.C., signed a milestone agreement Tuesday to connect up to British Columbia’s power grid.

The deal between Crown-owned BC Hydro and LNG Canada, a joint venture between Shell (TSX:SHC), PetroChina, Korea Gas Corp. and Mitsubishi, comes as the Liberal government announced the power rates for LNG proponents.

The rate structure follows recent government announcements covering income tax rates and environmental emission standards for the LNG industry. There are 18 potential projects at various development stages, but none have made a final investment decision.

The government’s tax, emission and power standards are geared towards providing investor certainty as companies decided on proceeding with multibillion -dollar projects.

The agreement is the first signed with an LNG proponent.

“This is like having an anchor tenant on any power deal,” said Natural Gas Development Minister Rich Coleman.

LNG Canada link for info on their partners/project and economic opportunities - http://lngcanada.ca/contact/

craneSpotter Nov 7, 2014 10:41 PM

LNG Canada - started environmental assessment today.

Shell says LNG project in B.C. to cost up to $40-billion when complete

Financial Post - November 7, 2014

Quote:

CALGARY – Pleased with British Columbia’s fiscal terms for the nascent liquefied natural gas industry, the LNG Canada consortium headed by Royal Dutch Shell PLC started a 180-day environmental assessment review Friday for a plant in Kitimat that could cost as much as $40-billion.

“We believe that [the fiscal terms] are a step in the right direction,” Susannah Pierce, LNG Canada’s director of external affairs, said in a conference call from Vancouver. “We are moving the project forward. But there are a number of new steps that we need to get through, including the overall cost of this facility and how that meets our expectation [before moving] to a positive final investment decision.”....

...Ms. Pierce said discussions with Ottawa on ways to reduce federal taxes and make Canadian LNG globally competitive are continuing.

“We are working in a fairly high-cost environment here in B.C. and Canada,” she said, citing lack of labour, high construction and operating costs. “We are going to need to make the economic case here in Canada, and it is challenging.”

The consortium believes the facility could cost between $25-billion and $40-billion for a four-train facility.

In its application for an environmental assessment certificate, Shell (50%), with partners PetroChina (20%), Korea Gas Corp. (15%) and Mitsubishi Corp. (15%), said it spent the past three years on environmental studies, design work and engagement with local communities and aboriginal groups.
http://business.financialpost.com/20..._lsa=20d8-fa7b

Stingray2004 Nov 8, 2014 12:34 AM

Interesting tidbit from Vaughn Palmer's column from a few days ago regarding Royal Dutch Shell's recent global investor update conference call:

Quote:

An executive of the parent Royal Dutch Shell was generally upbeat about the Kitimat project in a conference call with investors last week, saying: “If we’re not first to market, I think we’ll be one of the first to market.”
Still suspect that their FID will be sometime in 2016 though.

craneSpotter Nov 10, 2014 6:27 PM

Quote:

Originally Posted by Stingray2004 (Post 6799848)
Interesting tidbit from Vaughn Palmer's column from a few days ago regarding Royal Dutch Shell's recent global investor update conference call:



Still suspect that their FID will be sometime in 2016 though.

Yeah, many executives seem positive...but 'a bird in hand is worth two in the bush' :) Fingers crossed that a few get built and the fracking isn't as bad as some say... already increased drilling activity in the NE I understand - so another good sign.

milomilo Nov 11, 2014 4:22 AM

Quote:

Originally Posted by craneSpotter (Post 6802265)
Yeah, many executives seem positive...but 'a bird in hand is worth two in the bush' :) Fingers crossed that a few get built and the fracking isn't as bad as some say... already increased drilling activity in the NE I understand - so another good sign.

It isn't ;)

There are issues with it for sure, but mostly not the hysterical nonsense seen in the media. And many of the criticisms levelled at it are in fact criticisms of the entire extraction process, not the actual fracking.

It's a hell of a lot cleaner than mining, at least.

MalcolmTucker Nov 11, 2014 6:17 PM

Yeah, most of the issues in Pennsylvania were about water disposal, of which there were basically no rules due to super odd rules brought in under the republican troika in the mid 2000s. Companies were dropping off produced water full of radioactive and heavy metals at standard municipal water treatment plants that had no capacity to deal with them. In Canada, it is pretty normal to use a disposal well to get rid of particularly nasty waste from the process.

In places that aren't choke full of wells from earlier generations of gas and oil production fracking should be a bit safer. You don't have to worry about any migration except through your casing.

Stingray2004 Nov 15, 2014 8:57 AM

Still recall that Petronas was negative in terms of the BC LNG tax leading up to same. Now, it has been reported that they are satisfied with same. So be it.

Also note that Petronas, for whatever reason, still wants to go ahead with its FID next month in December. Was apprehensive of same due to the CEAA environmental certification, which may extend until next May. However, appears Petronas will receive its BC enviro certificate shortly.

And BC LNG minister Coleman met with Petronas in Kuala Lampur this past Tuesday on November 11. No word what transpired there.

Yet 3 days later, Japex, a 10% interest holder in Petronas proposed LNG facility and upstream NG assets, announced construction of its Japan Soma LNG import terminal.

Where will the LNG imports for same come from? Petronas BC LNG facility.

http://www.argusmedia.com/News/Article?id=948160

Japex would not commence construction without knowledge and confidence that FID will be issued by Petronas over here. My gut tells me that, in fact, Petronas will announce their FID next month. Stay tuned.

craneSpotter Nov 17, 2014 8:50 PM

Quote:

Originally Posted by Stingray2004 (Post 6808584)
Still recall that Petronas was negative in terms of the BC LNG tax leading up to same. Now, it has been reported that they are satisfied with same. So be it.

Also note that Petronas, for whatever reason, still wants to go ahead with its FID next month in December. Was apprehensive of same due to the CEAA environmental certification, which may extend until next May. However, appears Petronas will receive its BC enviro certificate shortly.

And BC LNG minister Coleman met with Petronas in Kuala Lampur this past Tuesday on November 11. No word what transpired there.

Yet 3 days later, Japex, a 10% interest holder in Petronas proposed LNG facility and upstream NG assets, announced construction of its Japan Soma LNG import terminal.

Where will the LNG imports for same come from? Petronas BC LNG facility.

http://www.argusmedia.com/News/Article?id=948160

Japex would not commence construction without knowledge and confidence that FID will be issued by Petronas over here. My gut tells me that, in fact, Petronas will announce their FID next month. Stay tuned.

Thanks! Promising info. Import terminal to be located in Fukushima beside future 1200 MW gas generating facility.:tup:

MalcolmTucker Nov 18, 2014 8:49 PM

^ There is enough LNG on the spot market right now that it shouldn't be a problem, but long term you would want to lock in.

craneSpotter Nov 25, 2014 6:45 PM

Exxon becomes seventh member of B.C. LNG Alliance

VANCOUVER — The Globe and Mail - Nov 19, 2014
http://www.theglobeandmail.com/repor...ticle21656784/

Quote:

Exxon Mobil Corp. has become the seventh member of the B.C. LNG Alliance, joining the trade association as it ramps up efforts to promote the province’s fledgling liquefied natural gas industry.

Irving, Tex.-based Exxon Mobil and its Canadian unit, Imperial Oil Resources Ltd., are in the early planning phase for the West Coast Canada LNG project at Tuck Inlet, located near Prince Rupert in northwestern British Columbia.

“We are committed to working with the provincial and federal governments in developing a regulatory and fiscal framework that sets the right conditions in place to establish a globally competitive and thriving LNG sector in B.C.,” alliance president David Keane said in a statement Wednesday.

There have been 18 B.C. LNG proposals announced so far, though no venture has made a final investment decision yet to forge ahead.

Exxon Mobil, through its affiliate, Exxon Mobil LNG Market Development Inc., said nurturing long-term relations will be crucial.

Stingray2004 Nov 28, 2014 1:59 PM

Quote:

Reuters

Fri Nov 28, 2014

The CEO also said Petronas' decision to invest in the Pacific Northwest LNG project in Canada is 75 percent complete, and that the company is now in the process of negotiating with bidders of related contracts.

"The numbers (value of the contracts) are still not as good as we expected but we hope to come to a conclusion within the next couple of weeks," Shamsul said.

He dismissed any impact on the investment from declining oil prices, saying economics of the project are still favourable.
http://uk.reuters.com/article/2014/1...0T850D20141128

Stingray2004 Nov 29, 2014 12:30 AM

Well, Petronas received their BC Environmental Assessment Certificate last week for its proposed LNG facility. Concurrently, Trans Canada Pipeline received its BCEAC last week as well for its connecting NG pipeline from NE BC to the west coast.

In any event some further news today from Petronas:

Quote:

Bloomberg News

Petronas to Meet Canadian Officials to Conclude LNG Decision

By Chong Pooi Koon November 28, 2014

Petroliam Nasional Bhd., Malaysia’s state-owned energy company, said most issues hindering its Canadian liquefied natural gas project have been resolved and a final investment decision will be made by the end of next month.

Chief Executive Officer Shamsul Azhar Abbas will travel to Vancouver tomorrow to meet with British Columbia officials to work out the “loose ends,” he told reporters today in Kuala Lumpur. The project is slated to start operations in 2018.

“We are going to sit down together and discuss firmly so that clarity is given,” Shamsul said. “We have the balance of one quarter of issues at hand. We reckon we can sit down and strike a solution.”
http://www.businessweek.com/news/201...e-lng-decision

Alpine Nov 30, 2014 1:31 AM

Some questions for those in the know:

1. Do you think BC will set up a Norway-style sovereign wealth fund, or will it give away all the money to corporations like Alberta did? The PC's have eaten through the Alberta Heritage Fund and have gone into the red six years running, while schools and hospitals are crumbling. And if you criticize this, Albertans will cry "Unconstitutional! Hands off mah oil! NEP, NEP!"

2. If the loonie and oil prices continue to fall, will this be favourable or unfavourable for LNG exploration in BC?

3. Even with the office construction boom in downtown, does Vancouver risk running out of land to house these companies? Most of the downtown peninsula is condos, and I can't see land reclamation gaining widespread support.

4. Do you think a Horgan NDP government, or a Trudeau Liberal government, would be LNG-friendly?

DizzyEdge Nov 30, 2014 3:42 AM

Quote:

Originally Posted by Alpine (Post 6825590)
Some questions for those in the know:

1. Do you think BC will set up a Norway-style sovereign wealth fund, or will it give away all the money to corporations like Alberta did? The PC's have eaten through the Alberta Heritage Fund and have gone into the red six years running, while schools and hospitals are crumbling. And if you criticize this, Albertans will cry "Unconstitutional! Hands off mah oil! NEP, NEP!"

2. If the loonie and oil prices continue to fall, will this be favourable or unfavourable for LNG exploration in BC?

3. Even with the office construction boom in downtown, does Vancouver risk running out of land to house these companies? Most of the downtown peninsula is condos, and I can't see land reclamation gaining widespread support.

4. Do you think a Horgan NDP government, or a Trudeau Liberal government, would be LNG-friendly?

Would say rather than giving all the money to corporations, the PCs have instead spent the money on the public, who want high services combined with low taxes = nothing put into the bank for the future.

craneSpotter Dec 1, 2014 12:19 AM

Quote:

Originally Posted by Alpine (Post 6825590)
Some questions for those in the know:

1. Do you think BC will set up a Norway-style sovereign wealth fund, or will it give away all the money to corporations like Alberta did? The PC's have eaten through the Alberta Heritage Fund and have gone into the red six years running, while schools and hospitals are crumbling. And if you criticize this, Albertans will cry "Unconstitutional! Hands off mah oil! NEP, NEP!"

2. If the loonie and oil prices continue to fall, will this be favourable or unfavourable for LNG exploration in BC?

3. Even with the office construction boom in downtown, does Vancouver risk running out of land to house these companies? Most of the downtown peninsula is condos, and I can't see land reclamation gaining widespread support.

4. Do you think a Horgan NDP government, or a Trudeau Liberal government, would be LNG-friendly?

I have been following the LNG developments fairly closely for a while now, but I am not employed by the energy industry. So my thoughts are:

1. BC should concentrate on paying off debt. The Libs have said that they intend to start a savings fund - and this is good and a small one should be started (annual deposits) subject to prevailing rates of return, but I hope reducing the debt and funding education/health is #1 priority.

2. The companies say that the plants are financially viable even if there is a further drop in oil prices (dragging down energy prices overall in Asia). As long as the NG gas is cheaper here than there. The LNG companies have room for the contract purchase prices in Asia to drop somewhat, but of course only they know exactly how much.

3. The LNG companies will have rather small offices in Vancouver (there is no ongoing exploration and likely little expansion) - they say 100-250 employees each. So, counting the spinoff jobs in engineering, financial and legal I guess I would hope there is enough demand for space to absorb what they are/will build DT over the next few years. That is if 3-4 plants go ahead.

4. Yes. The NDP have stated they are for an LNG industry, just so long as the natives and the communities affected (and all BC residents for that matter) benefit and not just the foreign companies. However, if a few plants go ahead the NDP don't have much hope of winning the next election... unless some kind of 'event' happens to disgrace the BC Libs. Plus, the agreements with producers would already be in place.

I think all Trudeau was concerned about was getting 'more' scientific evidence on fracking and its safety.. while that scares the energy crowd I think there is decent science behind it. We need energy.. and every source will have it negatives...the sources with lesser impact to the overall environment will be hard to pass up.

s211 Dec 1, 2014 4:57 AM

Quote:

Originally Posted by craneSpotter (Post 6826346)
3. The LNG companies will have rather small offices in Vancouver (there is no ongoing exploration and likely little expansion) - they say 100-250 employees each. So, counting the spinoff jobs in engineering, financial and legal I guess I would hope there is enough demand for space to absorb what they are/will build DT over the next few years. That is if 3-4 plants go ahead.

As was explained at a recent NAIOP event, much of the jobs are already taking place elsewhere: Calgary, London UK, etc., where the real skill-sets lie. Yes, some jobs will be placed in Vancouver, but not nearly as many as people would hope or like.

Alpine Dec 1, 2014 6:45 AM

Quote:

Originally Posted by craneSpotter (Post 6826346)
3. The LNG companies will have rather small offices in Vancouver (there is no ongoing exploration and likely little expansion) - they say 100-250 employees each. So, counting the spinoff jobs in engineering, financial and legal I guess I would hope there is enough demand for space to absorb what they are/will build DT over the next few years. That is if 3-4 plants go ahead.

Quote:

Originally Posted by s211 (Post 6826533)
As was explained at a recent NAIOP event, much of the jobs are already taking place elsewhere: Calgary, London UK, etc., where the real skill-sets lie. Yes, some jobs will be placed in Vancouver, but not nearly as many as people would hope or like.

Is this the right way to go, keeping all the jobs in Calgary? I was hoping that the LNG boom would bring more head offices to Vancouver and increase overall wages, triggering a feedback loop--more VC and more head offices, more people coming here to make money.

Instead, I think we'll continue to be a city for people who have made money elsewhere. Pity.

Quote:

Originally Posted by craneSpotter (Post 6826346)
However, if a few plants go ahead the NDP don't have much hope of winning the next election... unless some kind of 'event' happens to disgrace the BC Libs.

Why are you so sure that the NDP will lose in 2017 if LNG exploration is successful? John Horgan is pro-energy and doesn't have the old-guard stink of Adrian Dix or Mike Farnworth. If he's smart enough to attack the BC Liberals' scandals (like BC Rail), cuts to MSP, Pharmacare, ICBC and Translink, plus their strong-arming of public school teachers, and if he can do this without looking like he's too close to the unions or environmentalists, The Liberals' victories are not exactly decisive; this is not like the prairies, where the Alberta PCs and Saskatchewan Party are literally invincible.

Anyway, this is not the politics subforums, so I will stop here.

csbvan Dec 1, 2014 6:58 AM

Quote:

Originally Posted by s211 (Post 6826533)
As was explained at a recent NAIOP event, much of the jobs are already taking place elsewhere: Calgary, London UK, etc., where the real skill-sets lie. Yes, some jobs will be placed in Vancouver, but not nearly as many as people would hope or like.

Yupp, meanwhile high-tech expansion continues in Vancouver bringing real jobs to the city. Job creation in general is actually quite good in Vancouver and has been over the last few years, going off of the most recent Stats Can numbers. If LNG busts, which isn't entirely unlikely, it will hurt BC's future outlooks but I don't know if it will have as significant a negative impact on Vancouver. It would obviously be nice if LNG was a boon to the province, and created a lot of jobs in Vancouver, but if that isn't going to happen then at least one can take comfort in the fact that the city has not vested its future in LNG. Unlike what the government in Victoria seems to have done.

Metro-One Dec 1, 2014 7:45 AM

The thing about BC is, it is a lot more than just Vancouver.

Even if LNG adds only 500 to 1000 office jobs in Vancouver through 4 or 5 projects directly (which is still nothing to sneeze at) it will also add many spin off jobs in the metro-area.

The real winning locations will be the communities that the LNG facilities themselves will be located in, supplying many full time permanent good salary positions. And again, such industrial complexes will also add spin off jobs as well (blue and white collar).

It is annoying how people always only think about Vancouver.

And there are plenty of risky unstable industries that Vancouver has vested its future into, welcome to the real world. Vancouver just has the benefit (thanks to its size) of having a more diversified economy, but a crash in real-estate prices could devastate the city, much more than other locations in the province ;)

Procrastinational Dec 1, 2014 8:37 AM

Quote:

Originally Posted by Metro-One (Post 6826606)
The thing about BC is, it is a lot more than just Vancouver.

Even if LNG adds only 500 to 1000 office jobs in Vancouver through 4 or 5 projects directly (which is still nothing to sneeze at) it will also add many spin off jobs in the metro-area.

The real winning locations will be the communities that the LNG facilities themselves will be located in, supplying many full time permanent good salary positions. And again, such industrial complexes will also add spin off jobs as well (blue and white collar).

It is annoying how people always only think about Vancouver.

And there are plenty of risky unstable industries that Vancouver has vested its future into, welcome to the real world. Vancouver just has the benefit (thanks to its size) of having a more diversified economy, but a crash in real-estate prices could devastate the city, much more than other locations in the province ;)

This is a good point. The benefits in Vancouver are minimal compared to the enormous benefits to some of the communities in the northern part of the province that currently have high unemployment rates. The decline in the forestry industry (as well as a few other resource based industries) has been hard in a lot of regions outside of Vancouver.

You don't notice it unless you leave the Lower Mainland, but a lot of people in BC are frustrated with how dominant Vancouver is in the province. I don't blame them. If you think about it, BC is one of the most unipolar provinces, and easily the most unipolar of the most populated provinces. The top 6 largest cities in BC are all in the Lower Mainland. Kelowna and Victoria don't even come close. Even in Ontario, where Toronto is "the centre of the known universe" :roll eyes: there is at least Ottawa to balance it out.

In a nutshell, who cares if it creates jobs in Vancouver... There are plenty of jobs being created there. What matters more is that jobs will be created in some of the smaller struggling communities.

jawagord Dec 4, 2014 3:13 AM

First shoe has dropped
 
Quote:

Originally Posted by craneSpotter (Post 6811072)
Thanks! Promising info. Import terminal to be located in Fukushima beside future 1200 MW gas generating facility.:tup:

Some announcement, petronas has postponed their decision. Cost estimates coming in to high, LNG prices Falling with price of oil, this project is in trouble. If they have to make serious cost reductions could be a total resizing of the plant/pipeline and a couple year delay.:(

http://www.theglobeandmail.com/repor...ticle21923667/

MalcolmTucker Dec 4, 2014 3:35 AM

I bet the projects have missed the window. Even before the drop in prices (LNG has traditionally been priced by energy value equivalent to oil) it was iffy BC could make the window. If I remember correctly the market should tighten up in the middle of the next decade again.

Stingray2004 Dec 4, 2014 6:01 AM

Well, firstly the current short-term oil price blip (6 months - 2 years) really does not have much to do with same. Petronas proposed LNG facility would not come on stream until 2019 in any event. That is another 4+ years.

Secondly, most LNG contracts linked to the JCC are oil-indexed yet they are typically S-Curve contracts. IOW, the price of oil has a basement of roughly $45 per barrel and a ceiling of $85 per barrel in these LNG contracts in order to protect and hedge both the seller and buyer.

And these are long-term 30+ year facilities. Not dependent upon todays short-term oil price flux.

Most LNG facilities are also contracted out for 80% - 90% of their capacity. Leaves another 10% - 20% available for spot sales based upon the then prevailing market.

In any event, none of the foregoing matters much to the proposed Petronas LNG facility as both Petronas and its partners are all end-users to boot. Unlike Shell or Chevron which are not-end users.

Petronas also intends to pool some of the production for its other existing contractual obligations.

I always assumed that a firm FID was not in the cards this December. Yet I certainly suspected that they would go for a soft FID. BTW, December, 2014 has always been the timeline date for their FID since the get go a few years back.

The reason? Petronas still requires its federal CEAA environment certificate. The 365 day clock stopped back in May (day 167) and only recently restarted. Means that the CEAA certificate will not be issued until sometime in April, 2015.

Cannot proceed with hard FID until that has been received. Albeit, it has been reported that they are quite confident that they will receive same based upon media reports. And since then they have satisfied the outstanding juvenile salmon issue with respect to Flora Bank (utilizing a 1.6 km suspension bridge instead of trestle requiring no dredging that would disturb the sensitive eelgrass beds on Flora Bank).

Petronas is also now apparently completely satisfied with the BC government with regards to all aspects under their control. Even the BC preem and LNG industry minister Coleman were mentioned in their press release today confirming same.

Another major current obstacle appears that Petronas wants the bidding contractors to sharpen their pencils after relatively recently receiving their bids.

Quote:

Financial Post - “It’s both fiscal and regulatory certainties that we’re trying to run to ground here,” Pacific NorthWest LNG president Michael Culbert said in a telephone interview following the announcement.
In obvious reference to the delayed CEAA environmental certificate and construction bids higher than expected.

But this tidbit certainly stands out:

Quote:

Financial Post - “We still want to move this forward at a very aggressive pace so we haven’t set a date forward on purpose,” Pacific NorthWest LNG president Michael Culbert said.
And will say one thing. Petronas has been quite aggressive from the get go - ever since they purchased Progress Energy.

Right now, I would wager that Petronas will make their FID sometime in mid-April, 2015. After they have received their CEAA certificate and finalized the financial terms with their contractors.

PS. When the head of Petronas late last week was quoted as saying that 75% of the checklist had been completed toward their FID, the other 25% obviously still remained outstanding.

craneSpotter Dec 4, 2014 3:19 PM

Quote:

Originally Posted by jawagord (Post 6830513)
Some announcement, petronas has postponed their decision. Cost estimates coming in to high, LNG prices Falling with price of oil, this project is in trouble. If they have to make serious cost reductions could be a total resizing of the plant/pipeline and a couple year delay.:(

http://www.theglobeandmail.com/repor...ticle21923667/

Yup, certainly the delayed federal approval and a drop in oil prices give them reasons to see if they can't wring out a few more $$ from the province and demand more foreign workers. No doubt a drop in oil will have a downward pressure on all energy products and put all new large capital intensive projects on shaky ground.

Canada is a high cost environment (energy) for construction of energy infrastructure and it may take delayed projects and layoffs to bring down the rates.

China is expected to significantly ramp up LNG imports over the next ten years and surpass Japan as the world's largest importer, I have read that they have started construction on another 4-5 new LNG import terminals this year... somebody knows something... we'll see.

and on the heels of that....looks like oil will go down further. Canada may need the LNG terminals and the associated construction jobs more than ever....

Saudis escalate oil price war, sending crude slumping again

Dec 4, 2014 - Globe and Mail

Quote:

The moves are key to Canada, of course, given its reliance on oil production. Already, economists say, Canada can expect a small hit if the rout in the market is sustained.

It’s a tale of two economies, however, because Alberta would suffer while central Canada enjoys lower energy costs and the benefits of a currency sliding along with oil prices.

At a minimum, said chief currency strategist Camilla Sutton of Bank of Nova Scotia, today’s move by Saudi Arabia adds to the sentiment of lower oil prices for longer.
http://www.theglobeandmail.com/repor...ticle21948473/

craneSpotter Dec 4, 2014 3:32 PM

Quote:

Originally Posted by s211 (Post 6826533)
As was explained at a recent NAIOP event, much of the jobs are already taking place elsewhere: Calgary, London UK, etc., where the real skill-sets lie. Yes, some jobs will be placed in Vancouver, but not nearly as many as people would hope or like.

Yup, that's why I said 'small' offices in Vancouver. As explained before the LNG companies are consortiums of multi-national energy companies and will create (some have already) head offices in Vancouver for administration services. So, if 3-5 plants go ahead Vancouver would see ~2000+ jobs created downtown including spinoffs. Plus - thousands of jobs will be created during the years-long construction phase in Engineering etc. On the pipeline, gas exploration/drilling and supply end - stuff like engineering will mostly happen in Calgary where it is already established, but the majority of the (construction) jobs will still be here in BC.

The biggest impact will be the plant themselves, which will create thousands of ongoing production jobs in the northeast (export terminals) and northwest (NG supply) parts of the province.

Alpine Dec 4, 2014 6:43 PM

I was so happy when I saw gas at 116.9 this morning, which I haven't seen since before the Arab Spring. Then I opened today's paper...

I wonder how much this will impact carbon tax revenues. Will Christy's dream of replacing the Patullo, or Dianne Watts' dream of LRT, be delayed also?

lubicon Dec 4, 2014 7:41 PM

Quote:

Originally Posted by Alpine (Post 6831243)
I was so happy when I saw gas at 116.9 this morning, which I haven't seen since before the Arab Spring. Then I opened today's paper...

I wonder how much this will impact carbon tax revenues. Will Christy's dream of replacing the Patullo, or Dianne Watts' dream of LRT, be delayed also?

If anything it might raise revenues from the carbon tax. Lower prices in theory should increase demand and increased demand means more carbon tax collected. Worst case is it will be revenue neutral in all likelihood.

craneSpotter Dec 5, 2014 2:58 AM

I'm sure this office will expand even more in the years to come :) This office is just gravy (10 jobs to start heh) and about time they finally figured it out... :)

National Energy Board to open office in Lower Mainland for community outreach and pipeline inspections


Vancouver Sun - Dec 4, 2014

http://www.vancouversun.com/news/Nat...394/story.html

craneSpotter Dec 5, 2014 6:42 PM

Quote:

Originally Posted by craneSpotter (Post 6830925)
Yup, certainly the delayed federal approval and a drop in oil prices give them reasons to see if they can't wring out a few more $$ from the province and demand more foreign workers.

So the drop in oil prices gives Petronas less cash to invest next year, so they want cheaper construction/engineeriing costs.

And, like mentioned, more foreign work:

Petronas wants engineering work for B.C. LNG venture to be shifted offshore

VANCOUVER — The Globe and Mail - Dec. 04 201

Quote:

Petronas plans to push contractors to shift more engineering work for a proposed B.C. liquefied natural gas venture to lower-cost centres offshore as the Malaysian energy giant squeezes suppliers.

Of the total $11.4-billion in estimated construction costs for the Petronas-led Pacific NorthWest LNG export terminal at Lelu Island, there would be $8-billion worth of imported goods and services spread over a five-year period....

...Engineering firms are expected to revise their plans with a view to greater input from “high-value engineering” offices in countries such as China and India, where labour costs for engineering work are lower than in North America and Europe. Firms wanting to do business with Petronas will be pressed to use their connections with Asian suppliers to get better deals for orders of raw materials.

Subcontractors will be asked to review their costs for an array of building plans, ranging from a work camp in Port Edward to a suspension bridge designed to avoid harming salmon habitat in Flora Bank. Drilling costs are being scrutinized at the Petronas-led North Montney Joint Venture, which has huge natural gas reserves in northeastern British Columbia.

An estimated 88 per cent of the $3.4-billion in project spending in Canada would originate from Canadian suppliers of engineering-related services, mostly from British Columbia....

...“We believe that the deferral is more of a negotiating tool than a reassessment of the viability of the project,” TD Securities Inc. analyst Scott Treadwell said in a research note Thursday.
So , sounds most of the Canadian sourced engineering will be BC based, which is good news. No surprise about the majority of the materials being sourced overseas...cheaper and these are coastal plants so easy/cheap shipping. I still understand there will be some fabrication in North Van as well as on-site.

Also, looks like they will squeeze the Alberta gas well drillers and pipe layers to lower their prices.

jawagord Dec 6, 2014 5:41 PM

A lot of things are changing in the Asian gas market that are pressuring the economics of BC LNG. On the plus side maybe the oil pipeline jobs will start looking better to Crusty as her LNG dreams go poof.

http://www.321energy.com/editorials/...sey120614.html

The huge gas export deals that Russia struck with China in May and October—with an agreed-upon price ranging from $8-10 per million British thermal units (mmBtu)—has likely capped investors’ expectations of Chinese natural gas prices at around $10-11 per mmBtu, a level which would make shipping natural gas from Canada to Asia uneconomic.

At these prices, not even British Columbia’s new Liquefied Natural Gas Income Tax Act—which has halved the post-payout tax rate to 3.5% and proposes reducing corporate income tax to 8% from 11%—can make Canadian natural gas globally competitive.

These tax credits are too little, too late, because Canada is years behind Australia, Russia, and Qatar’s gas projects. This means there’s just too much uncertainty about future profit margins to commit the vast amount of capital that will be needed to make Canadian LNG a reality.

Denscity Dec 6, 2014 6:45 PM

Negative comments from Alberta. We must be getting close. ;)

Metro-One Dec 7, 2014 2:36 AM

Quote:

Originally Posted by Denscity (Post 6833737)
Negative comments from Alberta. We must be getting close. ;)

I know, most of the comments from Alberta are hilarious and are dripping with a bizarre attitude of hoping for failure.

Denscity Dec 7, 2014 2:51 AM

Quote:

Originally Posted by Metro-One (Post 6834123)
I know, most of the comments from Alberta are hilarious and are dipping with a bizarre attitude of hoping for failure.

Ya. As if BCs LNG success comes at Calgary's expense.

MalcolmTucker Dec 7, 2014 5:31 AM

I wouldn't say it is that. It is the BC attitude that this would be easy. In Alberta we have lived this for a long time, and know even vast resources are hard to develop. Outside of the business press the attitude in BC seems to have been 'we're in the money!'.

Stingray2004 Dec 7, 2014 5:33 AM

Quote:

Originally Posted by Metro-One (Post 6834123)
I know, most of the comments from Alberta are hilarious and are dripping with a bizarre attitude of hoping for failure.

No doubt. Cannot get my head around same. Sound akin to some hard-core enviro Greens in the Metro Victoria area or some hard-left NDP types in east Vancouver.

Guess AB also has its fair share of enviro nutbars as well. Embarrassing for AB quite frankly.

To wit, the previous AB poster linked to an article that is wholly outta the mainstream and factually incorrect. I could respond to same but why bother. Hundreds of other global LNG articles out there, every day, that are also factually incorrect.

For example, Bill Gwozd of Ziff Energy Services of Calgary is renowned as a reputable NA natural gas specialist as well as an Asian LNG specialist who has prepared detailed reports on behalf of LNG proponents at the NEB. Very analytical stuff. Some of the best info out there. Not some poorly researched newspaper article.

Yet we get AB interlopers posting in this thread who deliberately attempt to both derail and mislead for some obvious nefarious purpose.

And, frankly, their ignorance and stupidity is bliss. Am not a type to ad hominem. But sometimes I have just gotta call em out.

Perhaps they are hard-core AB enviros? Perhaps they have some sort of strange grudge against BC for their perceived impressions against pipelines from AB to the coast?

Well they better think again. Just last week Insights West released an opinion poll of BCers and their attitudes of the Northern Gateway pipeline as well as KMs proposed twinning of the Trans Mountain pipeline.

Guess what? The majority of BCers do not oppose same. In fact, only 21% state that KMs TMP efinitely should not proceed. In that same vein, only 28% of BCers state that the NGP definitely should not proceed.

Again, some of the Albertans posting in this thread are either completely ignorant of LNG per se or have some other grudge against BC. Pity them and embarrassing for AB.


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