Saturday, October 4, 2014

Current Stage of LNG Projects in BC

The timelines for LNG in BC have been slipping and the government is going out of their way to try and show a huge interest in BC by listing every flight of fancy project out there.   Somehow by giving equal weight to serious projects and total pie in the sky projects the government thinks the public will be more sold on the LNG idea.

Here is my take on the 17 LNG projects in BC

Projects in operation 

Projects Under Construction - this means any approved project with an investment decision made

Probable Projects - These projects are far enough along that they likely will go ahead

  • WesPac - This is a small project next to an existing LNG plant owned by FortisBC.  3 mmtpa
  • Woodfibre LNG - a small project located in Woodfibre near Squamish.   The final investment decision was supposed to be before July 1st this year but we are now just over three months after that date with no decision.  Opposition is rising to this project.  2.1 mmtpa
Not only do I think there are only two probable projects, they also happen to be among the smallest ones proposed,   These two projects total 5.1 mmtpa, less than one feed train for a large LNG project.

Possible projects - the projects seem to be actively being worked on but by no means close to a final investment decision

  • Aurora LNG - It is still some years before a final investment is made but this projects has some Asian partners with markets and with deep pockets.  24 mmpta
  • LNG Canada - The project has four large companies are partners so the capital is not an issue.   Originally 2015 was stated as the date for a final investment decision, but the dates for everything to do with the project beyond the end of the environmental assessment process have been dropped   24 mmpta 
  • Pacific Northwest LNG - A final investment decision is supposed to come before the end of 2014 but with the noises from Petronas I have to wonder if the decision date will be significantly delayer - 19.2 mmpta
  • Prince Rupert LNG - British Gas is the propoent of this project but I suspect that without a partner they will not move forward.   21 mmtpa
These four possible projects are all large ones.  They are big enough that the partners could spend $200,000,000 on their project and easily walk away because this is only 1% of the project cost. These projects will be entirely tied to long term prices for LNG in Asia.   Everything depends on the price differential between BC and Asia being large enough in 2025.   If one of these four is built this is 20 mmtpa of LNG.

Speculative Projects - they have at least something done but not much

  • Kitimat LNG - A project partnership between Chevron and Apache.   The project has gone rather quiet.   I suspect that the partners need more partners with a lot of capital
  • WCC LNG Ltd - this project is very early days with the most optimistic final investment decision date still four years away.  They do have an export permit.  20 mmtpa 

Very Speculative Projects - I do not believe these projects will happen

  • Discovery LNG - The project is proposed by Quicksilver Resources.  As a project it makes no sense to me because it is not near any natural gas.   The cost of going to the island makes this unrealistic.
  • Grassy Point LNG - this is a project by Woodside Energy of Australia.    There are no dates for when they might make an investment decision or when it might be built.  Without some partners with deep pockets I can not see how this goes forward given the large cost overruns and delays of the Pluto LNG project.
  • Kitsault Energy - The owners of Kitsault are looking for another use for their town site and I think are trying to interest one of the LNG projects to locate there.   This in my opinion is not a serious LNG proposal
  • Steelhead LNG Corp - A partnership with one of the local First Nations.   It is very early stage for this project and there is no money to build anything.  No timelines exist for this project.  The capital costs of a pipeline to Vancouver Island makes it an uncompetitive location.
  • Canada Stewart Energy Project - This is one of the newer projects and seems to be primarily connected to Chinese State enterprises.   The project timelines are fantasies.  They are suggesting building the pipeline and facility starting in 2015

Unknown - I can not find out enough about these projects to understand where they are at

  • Douglas Channel Energy - This project is one of the smallest ones and one of the few that I thought was realistically going to be in operation.   It ran into major financial problems October 2013.  AltaGas was supposed to be stepping in but as of August this had not happened.  I do not know the current state of the project
  • Triton LNG - This is a project between AltaGas and Idemitsu to build a floating LNG facility.   It would be a small plant but no site has been chosen
  • Watson Island LNG - this is a small proposed to redevelop Watson Island as a LNG export terminal in Prince Rupert, but beyond that I know nothing about it

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