Quote:
Originally Posted by MalcolmTucker
^ And that is one that should have had the lowest cost per unit produced.
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One would think that with:
1. FLNG (floating platform is apparently more cost effective);
2. An already dedicated small-diameter pipeline to the north west coast owned by AltaGas;
3. Purchase of gas from AECO Hub (prices now not only slightly cheaper than Henry Hub on a per unit basis but also in cheaper Canadian $);
That said, AltaGas stated that they required $10 MMBtu to make the project viable. Doesn't make sense with all of the foregoing.
And they couldn't land any "off-take" agreements.
Remember, the AltaGas proposal is similar to the "tolling" LNG model on the U.S. Gulf Coast - production facility purchases NG at Henry Hub prices, charges $1.50+ liquefaction fee, etc. to purchaser, and purchaser must also arrange for pick-up by chartering LNG tanker.
A lot of the off-take agreements on U.S. Gulf Coast LNG are not by actual "end-users" but by arbitrage seekers and many are getting burnt right now. Many actual purchasers want "security of supply long-term", etc. and this biz model doesn't provide that for 'em.
In any event, AltaGas is also involved with LPG (not to be confused with LNG) in terms of constructing a $500 million facility in NW BC with its Japanese partner Idemitsu for what is an apparent lucrative niche market in Asia.