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  #201  
Old Posted Dec 7, 2014, 5:40 AM
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Originally Posted by MalcolmTucker View Post
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!'.
Ohhh come on. It aint easy. Its been quite a few years in BC as a matter of fact. But I do know and understand the global LNG biz. For years as well. And the intricacies and complexities involved. And that certainly is not the attitude in BC. Are you reading the AB press?

I personally read everything. From AB Oil Magazine on down. And have access to internal industry insights FWIW.

OTOH, the highest cost oil on the planet, the AB oil sands, aint easy to develop based upon the break-even costs associated with same, the congested pipeline network to the US (esp the Gulf Coast), and lack of access to tidewater in BC to access other markets and receive a higher price v. discounted rates now.

Now that aint gonna be easy moving forward. Seriously.
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  #202  
Old Posted Dec 7, 2014, 5:57 AM
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Well then you've read the same predictions that if projects weren't too market pretty soon here that the next window wasn't until the middle of the next decade. Oil at least is readily fungible with rail, even when it gets to only marginally profitable. LNG is just so specialized. I am not sure of even a appropriate market comparison - maybe uranium?

I am not really sure with the tax structures in place now (since I haven't read much on the transfer pricing in the LNG tax scheme) does it make that much more of a difference if the huge volumes flowed through the continental supply chain versus straight to the coast? (assuming the continent develops enough takeaway capacity for LNG that prices didn't drop).

Anything that helps support the AECO price would be great! But I know I won't be able to help myself from snickering a bit when the same things holding up oil pipelines starts to hold up natural gas pipelines, that is if we see a project pull the trigger.
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  #203  
Old Posted Dec 7, 2014, 6:13 AM
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Well then you've read the same predictions that if projects weren't too market pretty soon here that the next window wasn't until the middle of the next decade.
Predictions by whom? Some ill-informed newspaper article? Because Royal Dutch Shell, Chevron, ExxonMobil et al BC LNG proponents have a completely different viewpoint than what ya suggest.

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But I know I won't be able to help myself from snickering a bit when the same things holding up oil pipelines starts to hold up natural gas pipelines, that is if we see a project pull the trigger.
There we go! Knew it. Some ABers having a grudge against BC for perceived failure to date for AB oil pipeline approvals to the BC coast.

BTW, did ya know that 3 major natural gas pipelines have already received environment assessment approval certifications to proposed LNG terminals on the BC coast from NE BC? Petronas, Chevron, and British Gas (BG) Group to date.

And all have the blessings of FNs as well as FN financial involvement.

Man, are you ever outta the loop.
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  #204  
Old Posted Dec 7, 2014, 6:23 AM
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Yeah, I figured it was all because of a grudge from the oil pipelines.

I actually do support the Kinder Morgan expansion (not the northern gateway though), but I would really really support the KM expansion if it came with a new refining facility in BC.
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  #205  
Old Posted Dec 7, 2014, 6:52 AM
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My issue with both pipelines is that the risk far outweighs any benefits that BC will ever realize. When alternative technologies are making some real headway not only in the west but also places like China, oil - especially heavy oil - has a limited shelf life. Sure, it is still about 30-50 years, otherwise the oil companies wouldn't be building out the tar sands.

Some examples:

Google's Ivanpah Solar Power Facility
First Solar's Agua Caliente Solar Project
China has over 400 photovoltaic companies and doubled generation in 2013 from 2012
Then there's the work of Tesla Motor's and full electric vehicles now in various levels of production by most global car manufacturers.
Batteries are about to be revolutionized with graphene.

Another big issue I take particularly with Kinder Morgan's project is Kinder Morgan. These guys are tax evasion geniuses spawned from the likes of Enron. Remember those guys...?
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  #206  
Old Posted Dec 7, 2014, 7:02 AM
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Well, I am okay with KM because it is simply expanding a pre-existing energy corridor (in an area with many more people observing it than the Northern Gateway) to an already extremely active ocean port (including existing oil tanker traffic).

So there really isn't that much more new risk and as I said, if a new refinery were part of the deal then BC would get a strong benefit out of the deal.

Overall though, I care much more for LNG to succeed than the oil pipelines in their current proposed forms.

And even with all the new energy technologies coming on line we will still require oil for the manufacturing / production of countless products.

Also, all these new energies will require their own mineral extraction for production, so I hope people in BC realize that even wind turbines and solar panels still require such industrial activities as open pit mining operations and manufacturing complexes.
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  #207  
Old Posted Dec 7, 2014, 7:47 AM
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Originally Posted by SOSS View Post
My issue with both pipelines is that the risk far outweighs any benefits that BC will ever realize. When alternative technologies are making some real headway not only in the west but also places like China, oil - especially heavy oil - has a limited shelf life.

Another big issue I take particularly with Kinder Morgan's project is Kinder Morgan. These guys are tax evasion geniuses spawned from the likes of Enron. Remember those guys...?
Not trying to denigrate your post, but the attitudes of the ABers on here vis-a-vis BC LNG is akin to your attitude about AB oil/bitumen pipelines to the BC coast.

Firstly, the Northern Gateway pipeline is dead. They will never be able to meet their 209 conditions imposed by the NEB - esp. regarding FNs and requirements thereto. Even newly minted AB premier Prentice recognizes that as he was involved, until recently, talking to these same FNs involving NGP. As an aside, Prentice is likely to be AB's best premier since Lougheed FWIW.

BTW, the NE quadrant of BC (where the Montney, Horn River, Liard, and Cordova Embayment natural gas basins are extant) are under Treaty 8 since 1899, the same Treaty 8 that covers the northern half of AB and the oil sands.

Unlike that region, the rest of BC to the northwest coast is not under treaty and Enbridge fricked up their relations with those FNs as well as coastal FNs and corresponding oil tanker traffic. Get them on the wrong side, lose their trust, and you are finished.

OTOH, the twinning of the Trans Mountain Pipeline is a different matter. A section was already twinned a decade plus ago through Jasper National Park and neighbouring Mount Robson Provincial park in BC. An additional section north of Kamloops was also twinned concurrently.

Unlike the proposed Northern Gateway pipeline, KM's proposed twinning is a "brownfield" project. IOW, twinning an adjacent pipeline of ~ 60 years. And most FNs along this corridor have already apparently signed onto benefit agreements with KM. Completely different situ than compared to Enbridge's NGP. Many FNs know that oil tanker trains are already moving from AB to the south west coast via the Fraser Canyon. Which abuts the huge salmon-bearing Fraser River. And train derailments thereto would be inherently risky.

Pipeline, OTOH, is the safest mode of transport esp. considering that BC is criss-crossed with ~100,000 km of NG/oil pipeline already. BTW, rail has common carrier provisions and cannot be legally prevented from carrying oil. Full stop. And I also certainly support the notion that AB should have the inherent right to transport its resources to tidewater, which is federal jurisdiction as well.

Not much, if any, opposition in interior BC, coastal BC until one hits its terminus - Burnaby. And Burnaby's mayor Corrigan has always been an oddball within Metro Vancouver. KM was undergoing drill samples on Burnaby Mountain to tunnel under same instead of going over - the original routing.

And, of course, hard-core enviro nutters showed up to protest. Bet that made an impression upon ABers. Problem is that they showed up in their cars. And had gas generators, to boot, at their encampment. All powered by fuel from the existing KM 'batched' pipeline.

And the BC media and Twitter was snickering at their hypocrisy. And the folk who got arrested were documented as mostly the same folk who got arrested at Van City Olympics 2010, the following so-called Occupy Movement, etc. They are called "Rent a Crowd" out here. Even one of the protest organizers convinced his 80-year old mother to get arrested in order to make an MSM impression. Pathetic.

In any event the Insights West opinion poll (from last week) of BCers attitudes to KM's TMP and whether it should proceed:

Definitely: 14%
Probably: 25%

Subtotal: 39%

Not Sure: 19%

Subtotal: 58%

Probably Not: 21% (the soft no crowd)

Subtotal: 79%

Definitely Not: 21%

And that 21% represents all of the protesters, enviro groups etc. The small minority as usual that reaps the MSM coverage.

At the end of the day, Enbridge's NGP is dead. Not so KM's TMP. In fact, I would financially wager that it gets built. And I don't personally gamble.

PS. Based upon the BC govt's so-called 5 conditions on risky AB bitumen pipelines, $1 per barrel per day to BC coffers on an expanded ~900,000 barrel per day TM pipeline would be adequate financial compensation for the inherent risk methinks. From a tariff upon Kinder Morgan. Not from AB itself.

Would be about $300 million+ per annum. AB shippers would still receive a much higher per barrel price than through existing congested pipeline channels/rail alternatives to its only market - the U.S. (important U.S. Gulf coast in particular). A win-win situ.

PPS. The current KM TMP is over-subscribed by about 60% to 70% very month. Shows the high demand and lack of existing capacity thereto.

PPPS. Of the current tankers leaving existing KM TMP terminus in Burnaby, their destinations:

1. California: 80%
2. U.S. Gulf Coast: 10%
3. China: 10%

Also remember that KM's TMP has a pipeline connector to WA State at Sumas, BC in the Fraser Valley. Connects to WA State oil refineries. Alaskan oil imports have been declining quite rapidly and WA State and Cali oil refineries are also looking for new oil feedstock.

Last edited by Stingray2004; Dec 7, 2014 at 8:43 AM.
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  #208  
Old Posted Dec 7, 2014, 3:35 PM
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I know, most of the comments from Alberta are hilarious and are dripping with a bizarre attitude of hoping for failure.
That's probably because Albertan's have seen this movie before while the neophytes continue to believe these multi-billion dollar investments will happen because BC is just such a great place to invest. There's a pattern to failed mega projects, great promise - delay - postponement - cancellation. It's happened with the Mackenzie Valley pipeline twice, after Syncrude it was 16 years before the next Oilsands plant got off the drawing board, pieces of the cancelled Heartland upgrader can be seen rusting at the plant site, ditto for Suncor's Voyageur project. Mega-projects are very vulnerable to changing market conditions and the market conditions for LNG are changing fast and not for the better. Cheerleaders outside the industry can cheer on, think positive thoughts, dream of head offices and high rise towers, all is good.
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  #209  
Old Posted Dec 8, 2014, 4:17 PM
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Originally Posted by Stingray2004 View Post
Predictions by whom? Some ill-informed newspaper article? Because Royal Dutch Shell, Chevron, ExxonMobil et al BC LNG proponents have a completely different viewpoint than what ya suggest.
You have to understand that the project teams whose jobs at attached to the individual projects have every interest in competing for capital amongst the different divisions of their multinationals have to keep a positive view point.


http://www.ceri.ca/index.php?option=...lication-pages
Global LNG: Now, Never, or Later?
Quote:
Low continental prices and an abundance of natural gas have generated interest both publically and privately to look into exporting liquefied natural gas (LNG). Of particular interest are the Asian markets where North American exporters hope to arbitrage high Asian prices against low continental prices. However, North American LNG exporters are not alone in trying to access the Asian gas premium. Australia has committed to considerable LNG export capacities and other gas producing countries are following suit. Concurrently, the abundance of continental gas supplies has increased domestic natural gas end-user demand within the utility, petrochemical, industrial and transportation sectors as well as sparked a debate on whether the United States should export large amounts of LNG. Thus, exporting LNG has significant challenges and North American exporters face considerable risks. With multiple pressures facing the North American LNG industry, many have been wondering if the window of opportunity for North American exports has vanished. This study summarizes current regasification and liquefaction capacities, explains LNG pricing, and reviews some of the risks for North American LNG exporters. The study concludes with addressing the question of whether there is room for North American LNG exporters in an Asian-Pacific market.
And this was before the arbitrage potential collapsed. An update this fall before the oil slump: http://www.ceri.ca/images/stories/CE...ct_29_2014.pdf
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  #210  
Old Posted Dec 9, 2014, 11:29 PM
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Originally Posted by MalcolmTucker View Post
I wouldn't say it is that. It is the BC attitude that this would be easy.
Oh, I don't think very many in BC thought LNG would be easy, or even a sure thing. British Columbians are more skeptical than that!

We don't have an LNG industry at all to speak of now, so really anything LNG is gravy. BC is predicted by many 'analysts' (for what that's worth) to lead Canada in economic growth over the next few years, regardless of LNG development.

I have one insider that I know, a senior officer for one of the proposed LNG developments - he maintains that at least 3 LNG plants will be in operation within 5 years. Maybe LNG is a safer place than marginal Oil plays right now to put the investment $$ in Plus, we are an energy hedge.
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  #211  
Old Posted Dec 9, 2014, 11:40 PM
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Oh, I don't think very many in BC thought LNG would be easy, or even a sure thing. British Columbians are more skeptical than that!

We don't have an LNG industry at all to speak of now, so really anything LNG is gravy. BC is predicted by many 'analysts' (for what that's worth) to lead Canada in economic growth over the next few years, regardless of LNG development.

I have one insider that I know, a senior officer for one of the proposed LNG developments - he maintains that at least 3 LNG plants will be in operation within 5 years. Maybe LNG is a safer place than marginal Oil plays right now to put the investment $$ in Plus, we are a global energy hedge.
Does Enbridge's Cabin LNG plant count? It's in BC's horn river basin. It's operational right now but hasn't produced anything because its not financially viable. They're waiting for natural gas prices to rise.
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  #212  
Old Posted Dec 10, 2014, 1:10 AM
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Nope. It is for processing out NGLs (which are petro-chemical feedstock and can be worth more than their heat value in the gas stream) and impurities.
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  #213  
Old Posted Dec 10, 2014, 7:28 PM
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Originally Posted by craneSpotter View Post
Oh, I don't think very many in BC thought LNG would be easy, or even a sure thing. British Columbians are more skeptical than that!

We don't have an LNG industry at all to speak of now, so really anything LNG is gravy. BC is predicted by many 'analysts' (for what that's worth) to lead Canada in economic growth over the next few years, regardless of LNG development.

I have one insider that I know, a senior officer for one of the proposed LNG developments - he maintains that at least 3 LNG plants will be in operation within 5 years. Maybe LNG is a safer place than marginal Oil plays right now to put the investment $$ in Plus, we are an energy hedge.
I would estimate about the same although 5 years is pretty optimistic. I would say 2-3 plants within the next 7-10 years.
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  #214  
Old Posted Dec 11, 2014, 6:20 PM
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Some more clarity on the makeup of the proposed workforce for Pacific Northwest LNG:

Petronas to hire hundreds of skilled foreign workers for B.C. LNG project

Globe and Mail - Vancouver - Dec 9, 2014
http://www.theglobeandmail.com/repor...ticle22016165/

Quote:
Skilled foreign workers will account for almost 40 per cent of the work force required to build the proposed Pacific NorthWest LNG terminal near Prince Rupert, according to regulatory filings. At the peak of construction, there could be roughly 2,460 Canadian workers and 1,540 foreigners at the terminal site on Lelu Island...

“We will hire Canadians if Canadians are available to do the job. It’s obviously easier to bring in somebody local into the job than to bring foreign workers in,” Pacific NorthWest LNG president Michael Culbert said in an interview Tuesday. “It comes down to the ability to source Canadian labour, both the numbers that we need and the expertise that we need...”

...“When you look at the magnitude of jobs that we’re creating with the whole package, it’s quite staggering,” he said, adding that in northeastern B.C., where Petronas unit Progress Energy is drilling up a storm, more than 6,000 Canadians have jobs on Progress-commissioned rigs and with associated suppliers.

If Pacific NorthWest LNG approves the Lelu Island terminal, finding enough qualified Canadians won’t be easy, Mr. Culbert said. About 500 workers would be required in the second half of 2015, then 2,500 people in 2016 as the building phase kicks off.
Why would they be "drilling up a storm" in 2014 when there is a glut of NG on the NA market? Must be to feed the future LNG export plant...
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  #215  
Old Posted Dec 11, 2014, 6:23 PM
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I would estimate about the same although 5 years is pretty optimistic. I would say 2-3 plants within the next 7-10 years.
Yeah, I agree. I should have said 3 plants in operation by 2020-2021. Keep in mind one export plant is on the smaller side and won't take as long to build. It does sound more like 4 plants now, including one small, one medium and two large ones
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  #216  
Old Posted Dec 11, 2014, 6:26 PM
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Hmmm. Hope this guy is right.

Petronas LNG project decision likely in months, says ex-leader

Calgary Herald - Dec 10, 2014
http://calgaryherald.com/business/en...says-ex-leader

Quote:
The former president of the deferred LNG project led by Malaysian national oil company Petronas says he’s confident its partners will give a final investment decision to proceed within the next three to six months despite plunging oil prices.

Greg Kist, who left the $36-billion Pacific Northwest LNG project in October, told a Toronto lunch meeting hosted and broadcast by RBC Dominion Securities on Wednesday that the project must be sanctioned soon to meet its targeted startup date in 2019.

“What you have to remember is that every one of these partners, whether it’s Japex or IOC or Sinopec or Petroleum Brunei, has a requirement for the delivery of those volumes at a certain time,” said Kist, noting construction and commissioning is expected to take 50 to 54 months (four to four and a half years).

“To the extent that this project doesn’t get kicked off, they’ve got to line up those volumes from somewhere else.”
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  #217  
Old Posted Dec 11, 2014, 6:43 PM
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Not directly related to LNG, but energy and within the same region of BC nonetheless... Victoria businessman David Black is continuing to push, and spend money on, building his massive $22 billion petroleum refinery in Kitimat.

David Black has Kitimat refinery plan drawn up

Victoria Times-Colonist, Dec 10, 2014
http://www.timescolonist.com/busines...n-up-1.1658597

Quote:
David Black’s vision for an oil refinery on B.C.’s northwest coast near Kitimat has crossed a small hurdle with completion of a design and feasibility study that lays out details of what would be a $22 billion facility.

Funded by Black, a newspaper magnate who has 170 papers across North America, the seven-month project was undertaken by engineering firm Hatch Ltd. It lays out plans for the proposed Kitimat Clean complex, which would be able to process 550,000 barrels of bitumen into 460,000 barrels of refined fuel each day.

“It’s a necessary step. You have to do the engineering and configuration to figure out what it will cost before you can get serious about discussing it with people,” said Black, who would not divulge the cost of the study, other than saying it “was quite a bit.”

The 270-page study shows a refinery that would be one of the 10 largest on the planet, employing 3,000 people...

...But Black still faces a huge obstacle — getting support from the Canadian petroleum industry.

He has financial backing from a Chinese bank, but it requires Canada to come up with 30 per cent of the cost.

Black said the federal government supports the idea in principle and it would likely provide about $10 billion in loan guarantees, enabling investors to secure loans at lower cost.

However, according to Black, Ottawa has said the province needs to buy into the project and he has to land a major oil company as a partner.

“I think those are reasonable requests on their part,” Black said.

The Canadian petroleum industry is proving to be a tough sell. Black has had no luck finding a partner. “I certainly haven’t given up. I still talk with them. But, let’s face it, the job of the president of a typical big oil company in Canada, because they are running a subsidiary of a multi-national corporation, is to get the oil out of the ground and out of Canada,” he said.

Black said he will continue to look for an industry partner.

“I don’t think there are any in Canada who will step up, but I am talking with others and there is some interest.”
I think if the LNG industry takes off, there actually is a possibility of this thing getting built - as the infrastructure (the refinery is to be fuelled with NG) will be put in place. Plus this would likely be the only hope of the Northern Gateway pipeline getting built.
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  #218  
Old Posted Dec 11, 2014, 7:14 PM
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Why would they be "drilling up a storm" in 2014 when there is a glut of NG on the NA market? Must be to feed the future LNG export plant...
Montney gas is pretty liquids rich which makes it profitable to drill right now. About the only gas drilling anyone is doing these days (say the last several years) is either due to there being lots of liquids in the gas, or they are being forced to drill due to land expiring.
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  #219  
Old Posted Dec 12, 2014, 2:43 AM
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Montney gas is pretty liquids rich which makes it profitable to drill right now. About the only gas drilling anyone is doing these days (say the last several years) is either due to there being lots of liquids in the gas, or they are being forced to drill due to land expiring.
True. I guess it was more that it was it Petronas subsidiary Progress Energy that was drilling up a storm. The liquids probably pay for the drilling!
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  #220  
Old Posted Dec 12, 2014, 3:04 AM
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They did when liquids were worth a bit more. Netbacks are suffering across the board. If you have cash though, continueing to drill is likely the smart move. You can always shut in or divert production to storage and wait for higher prices, then turn on the taps if you think you won't break even before your production starts declines. More and more pipelines are being built or converted to move natural gas liquids, which is reducing net backs. This is a big shift, because the Gulf Coast was/is awash in liquids from Eagle Ford (where production is 40% liquids iirc), and back haul capacity is being built to move liquids throughout the continent. Alberta was liquids short until recently when a new pipeline was built from the USA midwest, and liquids recovery started from oil sands processing (a company adds a module to a plant to extract liquids, replaces the heat value with dry gas). If this situation continues for much longer (awash in liquids, momentary drop in construction inflation) there are a few more manufacturing plants that will go forward to convert liquids into plastics, which is another way to export gas, just like Methanex in Kitimat was.
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