BC hopes ‘Gods of LNG’ will be kind in India

At a recent send-off gathering for Premier Christy Clark’s trade mission to India, Finance Minister Mike De Jong quipped upon getting the benevolence of the Indian Gods of LNG, to boost B.C.’ dream of becoming an economic powerhouse.
De Jong was speaking to about 250 people gathered at Vancouver’s Fairmont Waterfront Hotel last Friday night for the Canada-India Business Council of B.C. (CIBC) and TiE Vancouver’s second annual Grand Diwali (Hindu festival of lights) Gala.
While Diwali actually falls on Oct. 23, the gala celebrated the holiday in advance in order to “wish the Premier Christy Clark and her delegates a very successful visit to India on their trade mission,” which they leave for this week.
As Premier Clark packs her bags this week, it looks like she may have to invoke the intercession of those very Gods of LNG, De Jong quipped about.
A new report this week said liquefied natural gas (LNG) projects in Canada, Africa, and Australia face delays or even cancellation as global demand growth slows and U.S. output increases, according to Goldman Sachs Corp. (GS)
Worldwide demand for LNG will grow 5 percent on an annual compound basis by 2020, and 4 percent by 2025, Goldman Sachs analysts including Mark Wiseman in Sydney said in a report e-mailed today. The bank previously forecast growth of 6 percent and 5 percent, respectively.
Even the U.S., where Goldman expects final approval for more than 40 million metric tons of new gas production annually over the coming years, will not be spared from the pull-back, Goldman said. Advanced drilling techniques including hydraulic fracturing have made the U.S. the world’s largest producer.
“The window for U.S. LNG is limited,” Goldman said in the report. “Given the substantial contracts that have been signed in the last couple of years with U.S. LNG projects, we believe investors should seek exposure to low-cost LNG export capacity, and be realistic about expectations for further contracts.”
U.S. supplies will compete with cargoes from Qatar and Australia, two of the biggest exporters, shifting global movements of the super-chilled fuel. Surging U.S. gas production from shale formations including the Marcellus deposit in Appalachia has sent prices tumbling 69 percent from their peak in 2008.
Factors that may slow demand for LNG include the restart of nuclear reactors in Japan, China’s success in shale-gas exploration and production, and economic conditions in the Association of Southeast Asian Nations, or ASEAN.
Canada, Australia said Bloomberg.
Several projects in Canada and Australia will probably face deferrals due to uncertain production costs and price-sensitive buyers, according to Goldman. 
The Goldman report comes in the wake of Malaysian energy giant Petronas threatening to walk away from a $10 billion liquefied natural gas plant in B.C. as it steps up its campaign for tax incentives.
The B.C. legislature which has a rare fall sitting of the house that began this week  is expected to debate the introduction of the government’s long-awaited tax structure for its proposed multi-billion liquified natural gas industry.
One piece of the legislation will focus on the tax structure, which LNG project proponents, including Petronas, have been eagerly waiting for, while the other will relate to the emissions targets project proponents will have to meet.
The province is counting on the new tax structure introduced this week to boost the fledgling LNG sector and help the economy, with the aspirations that it will eventually wipe out B.C.’s debt.
There are now 17 proposals to build LNG export plants in BC. Some experts say there is only room for four at most in the province due to fierce global competition, according to the Globe and Mail.  No B.C. LNG projects are operating yet, leaving the province lagging behind rivals such as Australia, Nigeria and the United States.
The Petronas led Pacific NorthWest LNG, one of the largest B.C. proposals, is widely viewed as a bellwether for the fortunes of the province’s LNG industry. 
It estimates that $36-billion will need to be spent in order to make its planned exports a reality by early 2019.
Given the new report and threats by Petronas, India’s LNG players are expected to be courted heavily by Premier Clark who will be leading the  international trade mission to India from October 9-18, to strengthen trade and investment linkages with the South Asian country.
Joining her will be Advanced Education Minister Amrik Virk along with delegates from several sectors including film and television, clean technology, and advanced education. The Premier will travel to New Delhi, Mumbai and Chandigarh for face-to-face meetings with key business and government officials. Minister Virk will also travel to Bangalore to raise awareness of opportunities for partnerships in secondary and post-secondary education.
India is the world’s tenth-largest economy and most populous democracy. It is also one of the fastest-growing markets in the world. Supplying its growing appetite for goods and services is a significant opportunity for British Columbia exporters. In 2013, B.C. goods exports to India were worth $468 million, an increase of 45% compared to the same period in 2012.

LNG projects in BC

These are the export projects in various stages of development as of September 5, 2014:

Aurora LNG
Website: http://www.cnoocltd.com
Proponent: CNOOC Limited's wholly-owned subsidiary Nexen Energy ULC/ INPEX Corporation/JGC Corporation
Location: Grassy Point, north of Prince Rupert

Cedar LNG
Website: http://haisla.ca
Proponent: Cedar LNG Export Development Ltd.
Location: Douglas Channel, Haisla project lands

Discovery LNG
Website: www.discoverylng.com 
Proponent: Quicksilver Resources Canada
Location: Campbell River

Douglas Channel Energy project
Website: http://douglaschannelenergy.com/
Proponent: Douglas Channel Gas Services, Haisla Nation, Golar LNG, LNG Partners LLC
Location: Kitimat (floating facility)

Grassy Point LNG
Website: http://www.woodside.com.au
Proponent: Woodside Energy
Location: Grassy Point, north of Prince Rupert

Kitimat LNG
Website: http://www.kitimatlngfacility.com/
Proponent: Apache Corp. and Chevron Canada
Location: Kitimat

Kitsault Energy project
Website: www.kitsaultenergy.com/ 
Proponents: Kitsault Energy Ltd.
Location: Kitsault

LNG Canada
Website: http://lngcanada.ca/
Proponent: Shell Canada and their co-venture partners - KOGAS, Mitsubishi, and PetroChina
Location: Kitimat

Orca LNG
Website: http://orcalng.com/
Proponent: Orca LNG Ltd.
Location: Prince Rupert

Pacific Northwest LNG
Website: http://pacificnorthwestlng.com/
Proponent: PETRONAS/Progress Energy/JAPEX
Location: Prince Rupert

Prince Rupert LNG 
Website: http://www.princerupertlng.ca/
Proponent: BG Group 
Location: Prince Rupert

Steelhead LNG
Website: www.steelheadlng.com
Proponent: Steelhead LNG Corp. and the Huu-ay-aht First Nations
Location: Sarita Bay, Vancouver Island

Stewart Energy LNG
Website: www.stewartenergy.ca/en/ 
Proponent: Canada Stewart Energy Group Ltd.
Location: near Stewart, British Columbia

Triton LNG Limited Partnership
Website: www.altagas.ca/ or www.idemitsu.com/
Proponents: AltaGas Ltd. and Idemitsu Canada Corporation
Location: No site has been chosen, but Kitimat and Prince Rupert are under consideration.

WCC LNG Ltd.
Website: www.imperialoil.ca/ or www.exxonmobil.com/  
Proponents: Imperial Oil and ExxonMobil Canada Ltd.
Location: Tuck Inlet, Prince Rupert

Watson Island LNG
Website: http://princerupert.ca 
Proponent: Watson Island LNG Corporation
Location: Watson Island near Prince Rupert

WesPac LNG
Website: http://wespac.com/ 
Proponent: WesPac Midstream - Vancouver LLC
Location: Delta
Woodfibre LNG Project
Website: http://www.woodfibrelngproject.ca/ 
Proponent: Woodfibre Natural Gas Limited
Location: Squamish

In addition to the export projects above, these domestic LNG facilities are operating or proposed in the province:

AltaGas
Website: www.altagas.ca/ 
Proponent: AltaGas Ltd.
Location: proposal to build small LNG facilities throughout northern B.C.

Mt. Hayes Natural Gas Storage Facility
Website: www.fortisbc.com/
Operator: FortisBC
Location: Ladysmith

Tilbury LNG facility
Website: www.fortisbc.com/
Operator: FortisBC
Location: Tilbury Island in Delta