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.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.
Quote:
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Doug Bloom, president of Spectra Energy’s western Canadian transmission operations, said other global energy companies are interested in B.C.’s export gas potential as well. “There are still other parties that are investigating LNG in British Columbia that have chosen to not yet make themselves public
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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.
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