Proposed West Coast BC LNG Terminals

[jawagord]

In corrupt 3rd world countries there is a saying, "why make things easy when you can make them hard" as a way to extort money out of the citizenry. BC's enviro-nut local politicians are doing the same, not for money but to thwart fossil fuel development by denying companies their lawful rights and forcing them to go to court (see Kinder Morgan core sampling on Mt. Burnaby). LNG is the latest target.
In its court application, FortisBC said “that the four councillors that voted to deny issuing the development permit (Mayor Heintzman and Councillors Elliot, Prior and Kent) did so based upon irrelevant and extraneous reasons.”
“This is all what the Squamish district can do – make it hard,” said one observer who declined to be named as he was not authorized to speak to the media. “I would think the province would come down hard on the council to get this going.”
The B.C. Supreme Court has not set a hearing date, but the denial complicates the small LNG project that has already been pushed back six months.
http://www.edmontonjournal.com/Woodf...989/story.html

[jawagord]

I expect Shell will delay making a commitment on Kitimat/PR LNG projects until after this deal with BG closes and the "operations" of the two companies have been rationalized, probably 2-3 years down the road.

http://www.nationalnewswatch.com/201.../#.VSXJgxhOKrV

[Stingray2004]

Originally Posted by jawagord

I expect Shell will delay making a commitment on Kitimat/PR LNG projects until after this deal with BG closes and the "operations" of the two companies have been rationalized, probably 2-3 years down the road.

BG Group's proposed Prince Rupert LNG project was never high up the list of probables in the first place. Never had any upstream natural gas assets in NE BC, never had any partners, etc. BG Group also put the project on hold last fall and its project lead departed for the UK a few months back. Consider that project now shelved permanently.

BG Groups' global LNG assets are also not high-quaility - Egypt LNG no longer has a natural gas source and its new QCLNG in Australia's Gladstone has some of the world's highest opex due to utilizing coal bed methane as its source.

That said, Shell's proposed Canada LNG project in Kitimat continues to move forward. And strategically for them, they also have partners who are also major off-takers as well - Kogas, Mitsubishi, and Petrochina.

Also important to note that Shell's CEO Ben van Beurden confirmed a few months back that Canada LNG is Shell's global LNG priority while basically abandoning or deferring any future LNG proposals in Australia.

Still do not expect to see an FID for Shell's Canada LNG project for another 1 to 1 1/2 years as they have confirmed that they are looking at a 2016 FID.

[Stingray2004]

While Malaysian media reports a few months back confirmed that Petronas would be making its FID for its Prince Rupert project in June, subsequently the CEAA "stopped the clock" on its federal environment assessment again for a request on additional information. While Petronas has already received its BC EA, it never anticipated the lengthy delays in obtaining its federal EA.

Looks like Petronas will not receive its EA until late summer. That said, Petronas just all but confirmed that it will be making its FID in June - about 60 - 70 days from now realizing a later CEAA EA certification albeit they have previously stated their confidence in receiving same.

Low Oil Prices Improving Economics For Petronas-Led B.C. LNG Project

Financial Post

Yadullah Hussain | April 9, 2015 12:06 PM ET

TORONTO – Low oil and gas prices have improved the economics for a Petronas-led natural gas export project on the British Columbia coast as the company looks to make a final investment decision in June.

“Over the past three months, we have driven costs down … in a very significant way,” Michael Culbert, CEO of Pacific NorthWest LNG, a consortium led by Malaysia’s state-owned Petronas, told an energy conference in Toronto this week.

“As oil prices came down, other projects started to slide and defer, and we were in a situation where the EPCs [engineering procurement and construction companies] could take the contingencies they had built in their proposals and take those out, and we were able to lock [costs] in.”

Petronas, along with partners Sinopec, Japan Petroleum Exploration Co. Ltd., Indian Oil Corp. and PetroleumBRUNEI, deferred a final decision last December on the West Coast project as the company was not “satisfied that Canadian LNG, and our project in particular, was viable,” Culbert said.

The company has spent the past few months proving up natural gas reserves at the North Montney region of northeast B.C., which is crucial to ensure a long-term supply of feedstock for the project. The company has taken its proven, so-called 2P reserves to 17.9 trillion cubic feet in the basin, exceeding its target.

Pacific NorthWest is also negotiating for lower costs with TransCanada Corp., which is contracted to build the Prince Rupert Gas Transmission project from the North Montney region.

After consultations with First Nations, the pipeline’s length increased to 900 kilometres compared to the original mandate of 750 km, with as much as 100 km offshore.

“We are working very closely with TransCanada and we expect to have final pricing as we get to the end of April.”

The federal government’s allowance for capital accelerated costs, which gives LNG proponents a tax break, has also “added to the certainty,” Culbert said.

The proponent is expecting to receive a decision from the National Energy Board on tolling for the pipeline shortly, but another permit from the Canadian Environmental Assessment Agency for the project is taking “a lot longer than anybody anticipated.”

“That’s going to be ultimately the long-date item. So, a commercial final investment decision by June, and we will then wait for whatever final permitting and environmental assessment comes.”

http://business.financialpost.com/ne..._lsa=0afe-e1b2

[jawagord]

Beyond the Shell/BG merger issues - the dropping LNG price and possible supply glut will push back the large BC LNG projects as they won't be profitable at $6-7/mmbtu. June is coming up quickly will be interesting to see what Petronas does, but I expect postponement until we see sustained prices above $12.

http://www.vancouversun.com/Shell+pr...829/story.html

However, van Beurden has identified Canada alongside Australia, Brazil, Qatar, and United States as its “big five” areas of interest, going forward. In its presentation to investors, Shell identified LNG in Canada as one of the “options”, along with Gulf Coast export and upstream gas.

Amid a sharp focus on cutting capital expenditure, The Hague-based giant is already involved in the $1.5 billion 2.5 mtpa Elba LNG export joint venture with El Paso Pipeline Partners LP, and would soon own BG’s 15-mtpa LNG export plant in Lake Charles, La., with a current capital cost of $9.2 billion.

“If you look at the Gulf Coast, they have projects under construction. They would want to expand with their cheapest dollars — it would take so much less money,” said Dirk Lever, managing director, institutional equity research for energy infrastructure at AltaCorp Capital Inc. “B.C. LNG projects have many hurdles to cross,” including approval from First Nations, Lever noted.

B.C., which is hoping for at least three of the 18 proposed projects to get off the ground, boasts that its proximity to the Tokyo port could shave off as much as $1.50 per million British thermal unit in transportation costs, compared to Gulf Coast projects.

“Shell’s about to write a check for $70 billion to acquire BG. The first thing they ought to be doing is saying, ‘OK, what have we got; which ones .”

If Shell decides to proceed with its LNG plans on the West Coast over the next year, it will likely be in the backdrop of LNG prices that have collapsed from US$15 per MMBtu in September to US$7.50 currently, and could slip to US$6 in the second half amid a supply glut, according to Bank of America Merrill Lynch.

[jawagord]

Seems the Lax Kw'alaams band missed the message where they are supposed oppose only Alberta oil pipelines but support BC's LNG plans. 0 for, 180 against, Petronas must be thrilled.

http://www.ctvnews.ca/business/membe...tion-1.2362388

[Denscity]

There was an announcement today regarding PETRONAS. BC and PETRONAS has signed a memorandum of understanding regarding their $36B project.

[jawagord]

Originally Posted by Denscity

There was an announcement today regarding PETRONAS. BC and PETRONAS has signed a memorandum of understanding regarding their $36B project.

I think it is a good move by the BC government to bring long term stability to the LNG business, as I said before they needed to come to the table with some concessions, hopefully not to late in the cycle to get one of these projects going. like syncrude in the late 70's governments sometimes have to take less to establish the industry. Nice dig at the Alberta(BC) NDP too!


http://www.vancouversun.com/opinion/...618/story.html

Premier Christy Clark and her B.C. Liberals are going all-in to develop liquefied natural gas, agreeing to lock in provincial royalties, taxes and regulations for decades in an effort to persuade a Malaysian-led consortium to invest billions in B.C.
The first of those agreements was signed in Vancouver Wednesday by natural gas minister Rich Coleman and a representative of the Pacific NorthWest LNG consortium and released at a press conference afterward.

It pegs the natural gas royalty rates the consortium will pay on a sliding scale over 23 years, starting Jan. 1 of next year. In exchange, the consortium agrees to invest in increased natural gas production in B.C.

Clark, Coleman and Finance Minister Mike de Jong also heralded a project development agreement that would in effect indemnify the consortium against increases in carbon taxes, production taxes, and/or greenhouse gas regulations that would specifically target the LNG industry.

If the current or future provincial governments brought in such taxes or regulations during the decades-long life of the LNG project, the owner-operators would be in line for financial compensation.

Such long-term contracts cum insurance policies are common in some jurisdictions that seek to attract multibillion-dollar investments in LNG, the Liberals maintain. They are intended to provide certainty and minimize risk for investors.

Although Clark didn’t say it, foreign investors may have heightened concerns about the financial impact of changes of government in Canadian jurisdictions, given how the newly elected New Democratic Party government in Alberta is promising to review petroleum royalties.

[sunsetmountainland]

Welcome to British Columbia jawagord. I suppose it will only be a matter of time before you as well as many other albertans start to move to British Columbia. Since you have a socialist government with little hope for the future.

I wonder how the small business will do with a 15 dollar minimum wage in a have not province?

http://bcbudget.gov.bc.ca/2015/highl...Highlights.pdf

With over 90% of your exports to the US! With the US doing very well with oil. I am certain you will be happy to see your neighbours doing very well with international trade as well as LNG!

http://www.conferenceboard.ca/press/...an_cities.aspx

http://globalnews.ca/video/1999905/t...tro-vancouver/

[Metro-One]

Alright, lets keep things civil here.

[sunsetmountainland]

Originally Posted by Metro-One

Alright, lets keep things civil here.

I think everything is civil. It is all just about facts! With my argument.

[jawagord]

Originally Posted by sunsetmountainland

Welcome to British Columbia jawagord. I suppose it will only be a matter of time before you as well as many other albertans start to move to British Columbia. Since you have a socialist government with little hope for the future.

I wonder how the small business will do with a 15 dollar minimum wage in a have not province?

http://bcbudget.gov.bc.ca/2015/highl...Highlights.pdf

With over 90% of your exports to the US! With the US doing very well with oil. I am certain you will be happy to see your neighbours doing very well with international trade as well as LNG!

http://www.conferenceboard.ca/press/...an_cities.aspx

http://globalnews.ca/video/1999905/t...tro-vancouver/

Unlikely, too sunny and nice here to think about moving to BC. Besides Calgary will get all the pipeline and gas plant work if any of these LNG plants go ahead. BC's good fortune will be Alberta's good fortune!

[sunsetmountainland]

Originally Posted by jawagord

Unlikely, too sunny and nice here to think about moving to BC. Besides Calgary will get all the pipeline and gas plant work if any of these LNG plants go ahead. BC's good fortune will be Alberta's good fortune!

Well that sounds good. I think the LNG plants if they go ahead will be great for Canada. I would hope that Calgary as well as Alberta will be able to prosper with work from B.C. Just as B.C. has prospered from Alberta doing well.

I am just worried about an N.D.P. government in Alberta as I know how bad it was in B.C. when we had one. I do hope that the N.D.P. in Alberta will be as conservative as the Liberals in B.C. I just feel Alberta is in a fragile position with a N.D.P. government as well as low oil prices. It could be a very bad storm for the province.

[Stingray2004]

Earlier today in Kuala Lumpur, Malaysia the CEO of Petronas stated that it will announce a "conditional" FID for its proposed west coast BC LNG project "in the coming weeks". Petronas brass were already previously scheduled to be in Vancouver at end of June. "Conditional" in that the CEAA environmental certification won't be issued until September.

IOW, looks like she's a go! ($36 billion all inclusive).

The Malaysian Insider

Petronas To Announce ‘Conditional FID’ On Canadian LNG Project In Coming Weeks

Published: 22 May 2015
6:05 PM

Malaysian state energy firm Petronas said on Friday it will announce a "conditional" final investment decision on its proposed liquefied natural gas export terminal in Canada in the coming weeks.

This comes after the company reached a deal with British Columbia related to project on Wednesday.

"With this recent development, we are looking to achieve a conditional final investment decision in the coming weeks," president and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin said at a press conference where the company announced its first-quarter earnings.


"We will continue to have constructive engagements with the First Nation, and keep all avenues open as we move forward with our project."
At roughly US$36 billion (RM128.9 billion), the total investment by Petronas and its partners includes the construction of the Pacific NorthWest LNG export terminal near the northern city of Prince Rupert, a natural gas pipeline and ongoing gas development.

http://www.themalaysianinsider.com/b....n8OEspDJ.dpuf

http://ca.reuters.com/article/busine...0O70Y520150522

[SOSS]

This is a bit of a cart before the horse scenario. The native band on which this LNG plant would be built has declined a $1 billion buyout...

As for NDP in Alberta. It's not even close to the BC or Federal NDP. Considering the PC has done left the province squat in compared to other similar jurisdictions (Norway & Alaska), I welcome the change.

[sunsetmountainland]

Originally Posted by SOSS

This is a bit of a cart before the horse scenario. The native band on which this LNG plant would be built has declined a $1 billion buyout...

As for NDP in Alberta. It's not even close to the BC or Federal NDP. Considering the PC has done left the province squat in compared to other similar jurisdictions (Norway & Alaska), I welcome the change.

I can understand your frustration with the PC. However, I do hope you are right that, the N.D.P in Alberta is not close to the B.C. or Federal N.D.P!

Just like with the LNG in B.C. only time will tell with the Alberta N.D.P question.

[jawagord]

In one of the gloomiest forecasts yet for British Columbia’s nascent LNG sector, the International Energy Agency says prospects for export projects have ‘darkened’ and deferrals are likely.

In a five-year outlook on global demand for natural gas published Thursday, the Paris-based agency throws cold water on the B.C. government’s hopes of being home to three liquefied natural gas projects by 2020.

“Prospects for [Canadian] LNG projects have deteriorated and no plant is expected to be operational over the time horizon of this report,” the IEA said.

“One of the key – and largely unexpected – developments of 2014 was weak Asian demand,” IEA Executive Director Maria van der Hoeven said in the report. “Indeed, the belief that Asia will take whatever quantity of gas at whatever price is no longer a given. The experience of the past two years has opened the gas industry’s eyes to a harsh reality: In a world of very cheap coal and falling costs for renewables, it was difficult for gas to compete.”

China has been the big disappointment with gas slow to replace coal in power generation, although the fuel’s long-term growth potential remains promising.

Gas demand growth increased at a rate well below its 10-year average in both 2013 and 2014, and many parts of Asia have emerged as key areas of weakness, forcing the IEA to cut its growth forecast for global demand for gas to two per cent a year till 2020, compared to 2.3 per cent in previous forecasts.

The major natural gas winners will be the United States, which will see a number of LNG vessels set sail to Asia and Europe and emerge as the world’s third-largest LNG exporter after Australia and Qatar. Meanwhile, with 72 billion cubic metres of LNG capacity under construction, Australia is set to overtake Qatar as the world’s largest LNG exporter.

http://business.financialpost.com/ne..._lsa=c37b-3f0e

[Stingray2004]

The Petronas-led consortium has finally announced its FID for the $36 billion proposed LNG complex on BC's west coast. Great news!

Of course, the FID is conditional upon receipt of final environment certification by the fed's CEAA, which is expected by late September:

Malaysia-Led Group Gives Conditional Approval For B.C. LNG Project


By Gordon Hoekstra,
Vancouver Sun
June 11, 2015 4:56 PM

Pacific NorthWest LNG announced today conditional approval of a major liquefied natural gas export project in northwest B.C.

The company says its board of directors — representing all of the consortium's players led by Malyasian state-controlled Petronas — will approve the project on the condition it receives regulatory approval from the federal government and the B.C. Liberal government passes in law a project development agreement.

"The final investment decision will be confirmed by the partners of PNW LNG once (the) two outstanding foundational conditions have been resolved," the company said in a news release.

"The required technical and commercial components of the project have been satisfied," said the company.

The proposed project — including the terminal near Prince Rupert, a lengthy pipeline and extracting natural gas in northeast B.C. — is estimated to cost $36 billion.

Read more: http://www.vancouversun.com/Malaysia...#ixzz3cnsfzepy

[Denscity]

Awesome!! Now we just need something negative from Alberta's Jawagord to even this great news out!

[jawagord]

Originally Posted by Denscity

Awesome!! Now we just need something negative from Alberta's Jawagord to even this great news out!

Conditional Denscity means Petronas has kicked the FID down the road, how far down the road remains to be seen, still better than cancelled.