A leading contender to launch Canadian industry into the global liquefied natural gas (LNG) market has again rated a decision to go ahead on construction as imminent, provided “foundational conditions” can be satisfied.
Pacific NorthWest LNG said technical and commercial issues have been resolved, but two items still have to fall into place: approval of a project development agreement by the British Columbia (BC) legislature and acceptance by a federal environmental review.
The consortium set no definite dates or deadlines. Pacific NorthWest president Michael Culbert said only that the group stands “poised to make a substantial investment.” The sponsors are led by the Progress Energy arm of Malaysian state conglomerate Petronas and include minority partners from China, India, Japan and Brunei.
A promised final corporate approval to go ahead has been on hold since December, when Petronas-Progress postponed the decision due to shaky market conditions described as too “challenging” as a result of falling oil prices and the linked value of LNG.
BC Natural Gas Development Minister Rich Coleman and federal Natural Resources Minister Greg Rickford promptly issued statements repeating long-standing government support for LNG exports as a potentially major advance for the Canadian economy.
TransCanada Corp. also showered praise on Petronas-Progress in a formal statement. TransCanada president Russ Girling declared, “This development is a significant step forward” for his firm’s agreement to build a C$5 billion (US$4 billion) pipeline across BC to supply the proposed LNG terminal with northern shale gas.
The terminal, forecast to cost C$12 billion (US$9.6 billion), has a long-term license to export up to 2.7 Bcf/d from the National Energy Board. The BC and federal government have granted Pacific NorthWest and its sponsors special, favorable taxes and royalties. Benefits agreements continue to be sought with aboriginal communities at the northern Pacific coast terminal site near Prince Rupert and along TransCanada’s proposed pipeline route.