Proposed West Coast BC LNG Terminals
 

Seems like alot of major energy players are looking at monetizing their enormous tight gas/shale gas reserves in the Montney, Horn River, Cordova Embayment, and Liard basins situate in NE BC.

While natural gas is roughly in the $2 MMBtu range here... in Asia it approaches $17 MMBTu. With arbitrage, the netbacks for NE BC gas producers would be considerable as long-term lng contracts in Asia are tied to the price of oil. LNG shipping time to Japan, for example, is also apparently the same transit time from the proposed coal bed methane lng terminals on Australia's east coast.

Some estimates are that the numerous BC proposed lng terminals could result in an additional roughly $600 billion in BC GDP, plus additional $billions annually into BC government coffers.

In any event, another lng proposal was announced yesterday:

1. BG Group, with it's proposed ~$24 - $32 billion lng terminal on Ridley Island in Prince Rupert, entered into an agreement with pipeline major Spectra Energy yesterday to construct a massive 48-inch pipeline from NE BC to Prince Rupert with an estimated $6 - $8 billion cost.

The BG Group is contempalting their PR facility to have lng throughput of 4.4 billion cubic feet/day, which equates to 30% of all natural gas produced in Canada in 2011. We are looking at a minimum $30 - 40 billion investment exclusive of further $billions in field development here alone.

http://www.spectraenergy.com/content...c_lng_full.jpg

http://www.calgaryherald.com/busines...132/story.html


2. Royal Dutch Shell/Mitsubishi/Korea Gas/Petro China are proposing a $12 billion lng terminal in Kitimat and have applied to the NEB for exporting 3.5 billion cubic feet/day, which equates to 25% of all natural gas produced in Canada in 2011. The ng will be sourced from their upstream NE BC fields.

In addition, they have entered into an agreement with TransCanada Pipelines for a new $4 billion pipeline from NE BC to Kitimat.

3. Encana/Apache/EOG Resources are proposing a $6 billion lng terminal in Kitimat with another pipeline to NE BC. They are also estimating $15 billion worth of field development over a 25 year period to source the terminal.

4. Malaysian giant Petronas purchased a $1 billion interest in a NE BC field from Progress Energy and a few months back purchased Progress Energy for $6 billion. Interestingly enough, another unnamed bidder (speculated to be Exxon, Shell, or BG) came in with a higher offer, which Petronas met.

Petronas already has a site lined up in Prince Rupert albeit they have not disclosed their plans yet.

5. News reports from the U.S. have confirmed that Exxon is looking at constructiing an lng terminal on BC's west coast as well.

Japanese Inpex and Itochu are also rumoured at constructing an lng terminal off BC's west coast.

http://www.vancouversun.com/business...#ixzz26DPfji2M

I'm sure that alot of consolidation will occur over the coming years. Make no doubt about it... if these lng plants all come to fruition the intensive capital and labour requirements will likely rival Fort Mac in AB.

Extremely impressive numbers! How exciting!!

Forget Alberta's crappy oil pipeline, here is some real investment for BC's economy! I really hope the full scale of this comes to fruition.

So:

Oil pipeline = bad
Gas pipeline = good?

:previous:Its because nearly all of the economic benefits to be had from the oil pipeline occur in Alberta while BC takes the majority of the environmental risk. All of the processing facilities, extraction sites, etc... for these gas pipelines will be in BC (along with the tax revenue), which means major economic benefit for us along with the risk. Also, correct me if i am wrong, I believe potential natural gas leaks / spills are not as harmful as crude oil leaks.

Natural Gas = Methane. One of these pipelines bursting would be no more harmful to the environment then every beer drinking male in this country making his personal "contribution" to the atmosphere.

Yes, precisely that.

A natural gas leak would be 100000000 times less damaging to the environment than a crude oil leak.

Aside from the 4 major contemplated lng terminals/ global energy giants described above... BC Energy Minister Rich Coleman today confirmed that 2 other majors also have serious intentions... one player is looking at Kitimat and the other is looking at Prince Rupert for their respective lng terminals.

Coleman also identified global energy giant Exxon Mobil as one of these companies.

Again, many of these players are also involved in Australia's lng terminal boom... and are both knowledgeable about prospects for offset buyer diversification/success as well as NE BC ng basin probable reserves in order to meet these lng requirements over a 20+ year time frame.

BTW, basins in Alberta will also eventually become part of the source supply inclusive of the Duvernay formation.

At the end of the day... pretty big stuff.

What makes BC think its so deserving of more energy revenues.

There are hundreds of pipelines criss crossing North America. I didn't hear Montana or Wyoming screaming about more revenues when the Keystone XL pipeline was proposed.

BC get over yourself. Let the pipeline run through the province and be thankful you're at the end so you get a terminal. You can't have your cake and eat it too.

Just because Montana and Wyoming don't complain, that means BC shouldn't as well? Tight logic.

The pipeline runs through the entire province horizontally. If they pipe ruptures, the chance that the affected area will be in BC is around 90%. Oh, and without the terminal on BC's coast, the oil wouldn't be going anywhere in Asia. BC definitely has a right to a bigger piece of the pie as it takes on most of the risk, and has the land to export abroad.

If you think that's too much to ask, try exporting it down south first, and then to Asia. I'm sure they'll give you a better distribution deal *sarcasm*.

LOL are you freaking kidding me with this post?

Have you ever taken a look at the topography of Wyoming/Montana VS British Columbia? BC is the most mountainous region of North America, with the most avalanches/rockslides/mudslides occurences by a WIDE margin....as a result of that topography, the province is taking on a HUGE HUGE amount of enviromental risk, one that could potentially damage OTHER BC based industries that would put THOUSANDS out of work. The fishing industry in North BC alone employs thousands of people...all who would be out of a job if there was a marine spill of crude oil.

So yes BC deserves to be compensated for that level of risk....Alberta is lucky to have oil reserves, BC is lucky to be located next to the Pacific...Alberta does not deserve to reap all the benefits while BC is left holding the f'ing bag on this one....and as long Alberta continues to think they can hold BC ransom, the longer this province and its people are going to fight this pipeline....as you can see BC has other means of revenue in natural gas, they certainly do not NEED this Alberta oil to maintain a strong economy.

At this point, Alberta NEEDS BC, not the other way around...BC is doing just fine on their own and have been for decades and has their own untapped energry resources that would employ tens of thousands of people and invest billions upon billions into the BC GDP & economy.

I agree with your comments, Alberta should go get it's own ocean.... We should be charging tariffs on any oil transported through BC and using our piece of the Pacific... I'm sure some sort of middle ground could be negotiated....

BC is doing fine, because of how much Alberta contributes to the rest of the country (including BC) in taxes & jobs. I suppose Alberta could impose export taxes to the rest of the country...but what good does a pissing match do?

Question for the political junkies - what real impact would a NDP government have on these LNG projects? Does he have a position?

I suppose it depends on whether their opposition to tankers extends to LNG ships as well. If so, then the projects are as good as dead.

If you can't go West. Go East to Churchill Manitoba and export to Europe. I think the oil/gas companies want world prices and don't care who the buyer realy is.

Europe is a declining market, Asia is a growing market.

There was already been an oil pipeline flowing through BC from Alberta since the 50s. It passes through Jasper National Park and crosses the Fraser River. it has never had a serious spill.

How many truck and train accidents have occurred in other provinces while hauling goods to and from BC ports?

If oil pipelines pass environmental assessment, does the Constitution even allow a government to impede inter-provincial commerce? I know in both the US and Australia state governments have zero jurisdiction over interstate trade and transportation.

Sounds like they also want to twin the pipeline from the 50s down to Vancouver. I agree the West Coast is a good option.

My point is if they can’t make this work due to environmental and public acceptance issues, then go east. Oil is a commodity, currently Europe gets most of its oil from the middle east. If they start to get their oil from Canada, then the middle east oil will likely end up in Asia.

So you guys rant about access to BC ports (provincial jurisdiction BLAH BLAH BLAH) but conveniently ignore that position when goods travel the opposite direction?

The costs and environmental issues of shipping bitumen east would be even higher due to increased distance and the fact that east coast and especially arctic ports are often iced in.

It's note quite a rant. If the communities along the route out west do not want the pipeline, then try something else.

There was recent article a few days ago on how the NDP is supporting increasing the volume of oil heating to Ontario/Quebec....
http://www.theglobeandmail.com/news/...rticle4574676/

Firstly, the only file that I recall the 1990's NDP administration doing anything right on was the then encouragement in expansion of the conventional natural gas sector in NE BC in terms of tax credits and royalty structure. I will give them credit there at least.

As for the current lng terminals, lng supertankers, natural gas-fired generation plants to power these lng terminals (massive amounts of electricity required), and the utilization of fraccing to bring these unconventional tight gas/shale gas desposits to fruition as the feedstock for the lng terminals, the current NDP position is:

http://www.allpolitics.ca/index.php?...y=NDP&refno=84

I wonder what spinoff there will be for Alberta based companies in all of this...

Virtually none as business won't make large capital investments under an NDP government.

fair enough lol.

And therein lies the rub. Don't cut your nose off to spite your face, BC.

i was in ft st john today, holy crap there is so much going on up there and that part of bc, jobs everywhere, they have a starbucks inside the safeway and apparently its often closed cause they can't staff it and when it is open they have lineups out the door, anyway that means nothing but so much housing and infrastructure going on up there, they are booming

And all the gas produced and raw materials used to build infrastructure up there pass through Alberta.

Actually, BC produces ~3 billion cubic feet of natural gas/day. ~2.2 billion cubic feet flows southward through Spectra Energy's Westcoast Transmission pipeline for BC use and then onto the Sumas/Huntington border crossing into the U.S Pacific Northwest and along the I-5 corridor into California.

In that vein, southern AB foothills natural gas utilizes TransCanada's Foothills pipeline that crosses into BC and then crosses into the U.S. at Kingsgate, B.C. to service eastern WA State, Idaho, etc.

Further confirmation that ExxonMobil is now in on the westcoast lng game with its $3.1 billion friendly takeover offer of natural gas junior Celtic Exploration today with upstream assets in BC's Montney and Alberta's Duvernay basins that would bolster ExxonMobil's plan for an lng terminal:

http://www.theglobeandmail.com/globe...rticle4617626/

Just read that the federal government has blocked this transaction within the last few hours. What a stupid decision! The "NET BENEFIT" criteria for Canada, and BC in particular, would have been financially enormous considering the $billions$ for the westcoast lng terminal, Petronas' international lng profile and connections, and the annual $billions required for ng field development to support the west coast lng terminal ng feed-stock.

Did I mention the additional huge chunk of annual change into BC's provincial coffers as well as the few thousand in employment opportunities for this contemplated project alone?

Energy junior Progress Energy just doesn't have those deep, deep pockets and international lng connections to develop same.

If Petronas has been turned down by Ottawa, China's CNOOC's $15 billion bid for Nexen is all but finished, utilizing the same criteria.

There might still be a light at the end of the tunnel for Petronas' takeover of Progress Energy though:

http://www.theglobeandmail.com/news/...rticle4626063/

http://online.wsj.com/article/SB1000...062952262.html

Looks like Imperial Oil will take a 50% stake in ExxonMobil's takeover of Celtic Exploration, which has large land holdings in BC's Montney natural gas basin. Exxon's westcoast lng plans are also starting to become clearer with a future contemplated capacity in excess of BC's current ng production:

http://community.nasdaq.com/News/201...storyid=193873

Norway's Statoil is also contemplating getting into the westcoast lng game:

http://www.businessweek.com/news/201...l-gas-business

And of course the Japanese Inpex/Nexen partnership are exploring lng export opportunities as well as is Talisman Energy. Likely to be alot of consolidation and further jv's here down the road.

Petronas and Progress announce go-ahead for $9-billion LNG plant at Prince Rupert

Much larger facility to be built if Ottawa approves Malaysian giant's purchase of Canadian company

GORDON HAMILTON, VANCOUVER SUN DECEMBER 4, 2012

Nexen, Progress foreign takeover deals approved by Canadian government

SHAWN MCCARTHY AND STEVEN CHASE
OTTAWA — The Globe and Mail
Published Friday, Dec. 07 2012

This is great news for BC! The new Pacific Northwest LNG terminal (which was given the green light to enter the design phase a few days ago) should be larger due to the approval of the Progress takeover.

Interesting that Nexen sold the Japanese nearly half of their NG holdings in northeastern BC in 2011, while forming joint ventures with CNOOC. I believe the US still has to approve CNOOCs takeover of Nexen Gulf of Mexico holdings. I assume CNOOCs takeover of Nexens UK/North Sea holdings is done.

I think the asians mostly just want Canadian LNG for export, as the demand for LNG in Japan and China is increasing fast. CNOOC can sell the oil it produces in Canada to US refiners, but more importantly gains Nexen's oil producing/exploration assets in the Gulf of Mexico and North Sea...

Only if there is pipeline capacity. Which there is not at the moment.

Yeah. I always knew that the Petronas take-over of Progress Energy would be approved. Good news indeed.

Petronas is looking at an 18 million ton/annum facility comprising 3 liquefaction trains with 2 initial liquefaction trains. While the proposed project is estimated at $11 billion, figures compiled by engineering and construction firm Bechtel suggest the numbers could be much higher, ranging as high as $22.5-billion. Makes sense from the current Australian lng perspective.

BTW, here's the location of Petronas proposed Prince Rupert lng facility on Lelu Island, just south of Ridley Island (island in light green):

http://4.bp.blogspot.com/-IHE3DioaQ2...tronas+LNG.jpg

And here's a schematical of the proposed facility:

http://investnorthwestbc.ca/uploads/...ronas%20SB.jpg

Finally here's a link to the Pacific Northwest LNG website:

http://pacificnorthwestlng.com

Some further corroboration today about Imperial Oil's future intentions with its parent ExxonMobil about westcoast lng plans:

http://business.financialpost.com/20...om-west-coast/

What. Is Keystone XL heading into stormy waters??

It hasnt been approved yet to my knowledge. Hopefully will be but at this moment there is not enough pipeline capacity.

The scale of northwest BC coast lng proposals is potentially phenomenal:

http://www.vancouversun.com/business...#ixzz2FLAcDfkk

http://www.ottawacitizen.com/busines...#ixzz2FLBWrHAX

Dang, talk about exciting times for BC! No more industrial butt of the joke if this goes through.

The first west coast lng project that received approvals was Apache/Encana/EOG Resources proposed 10 million ton/annum facility in Kitimat. The facility has previoulsy received NEB approval as well as BC environmental assessment certificates.

The problem was that these 3 North American natural gas producers only had experience in their upstream assets but had no lng experience, no lng tankers, no marketing arm with relationships to end-users, were cash-strapped, etc.

Speculation was that a global energy giant with lng experience and deep pockets would eventually step in and that's what Chevron did today.

Chevron purchased a 50% interest in the facility buying out Encana's and EOG Resources positions. Apache retains its 50% position.

Chevron has also purchased 110,000 net acres in NE BC's Horn River basin from Encana and 212,000 net acres in NE BC's Liard basin from Apache.

This lng facility is now on solid footing. Other lng energy giants such as Shell, Petronas, ExxonMobil, and British Gas Group also have lng facilities lined up in Kitimat/Prince Rupert.

http://business.financialpost.com/20...t-lng-project/

Today Malaysian energy giant Petronas partnered up with TransCanada Pipelines for a $5 billion pipeline from NE BC gas fields to Petronas' proposed Prince Rupert lng terminal.

Previously Shell also partnered with TransCanada Pipelines for a $4 billion pipeline from NE BC to its proposed lng terminal in Kitimat. In addition, British Gas (BG) Group partnered with Spectra Energy for a $6 - $8 billion pipeline from NE BC to its proposed lng facility in Prince Rupert. Chevron/Apache will also be looping an existing pipeline at a capital cost of ~$2 billion to the west coast for its proposed lng facility in Kitimat.

These pipeline projects alone total ~$20 billion in capital investment.

http://www.theglobeandmail.com/repor...rticle7095270/

Pretty big news by the Government of Japan considering that Japanese majors Mitsubishi, Inpex, and others are already heavily involved in Canadian west coast LNG projects.

http://business.financialpost.com/20..._lsa=9f1c-1059

I've seen a ton of commercials promoting tankers carrying oil/gas from our coast

With all these proposals in the pipeline there is some serious economic benefits for BC

We need to get the public on board so it can move past the proposal stage

Major international LNG giant Petronas of Malaysia has previously purchased Progress Energy for ~$6 billion, which has major natural gas upstream assets in NE BC's Montney basin. Petronas has also entered into a contractual arrangement with TransCanada Pipelines for a $6 billion natural gas pipeline from NE BC to Prince Rupert, the location of Petronas' proposed LNG facility.

Currently, the LNG facility and pipeline are in the BC Environmental Assessment Office stage with final certification expected by September, 2014. The Front End Engineering and Design has also been previously awarded to Bechtel/Samsung.

Ergo, a Final Investment Decision (FID) was expected in September, 2014 but after today's announcement that seems to be just a future formality. Today, Petronas announced that it will definitely be proceeding with the LNG facility (plus pipeline and upstream natural gas development) with a gargantuan capital cost of $36 billion!

http://www.theglobeandmail.com/news/...23/?cmpid=rss1

First Nations group is appealing to the UN to block the pipeline

http://www.vancouversun.com/news/fir...745/story.html

That's in reference to Enbridge's Northern Gateway pipeline to carry bitumen to the west coast. A completely different animal.

OTOH, FN's are not only onside with LNG and accompanying natural gas pipelines but they also either have minor equity stakes or financial agreements with the pipeline operators as well as the LNG facility operators. BTW, at least 4 natural gas pipelines from NE BC are planned to proposed west coast LNG facilities by Chevron, Shell, BG Group, and ExxonMobil.

Well that's big news. Looks like the 35 billion naval development plan just paid for itself.