A 50-50 joint venture of ExxonMobil and its 69.6 percent owned Imperial Oil is examining potential sites and assembling various technical and commercial elements of a grassroots LNG project in British Columbia, said Richard Kruger, Imperial’s recently appointed chief executive officer.
He told reporters the evaluation includes “the right fiscal framework, cost of resource development, market dimensions, project economics, construction costs and regulatory issues.”
Kruger said a decision to proceed would depend on the results of that work, setting aside any discussion of a timeline.
He also said it is too early to say how Canada’s Pacific Coast stacks up against other potential global locations for an LNG export project, noting that all hinges on factors such as the size and quality of the gas resource, the cost of developing that gas and the ability to deliver the gas to a liquefaction plant.
The joint venture is one of five proponents to answer the British Columbia’s invitation for expressions of interest in a possible terminal site on Grassy Point near Prince Rupert.
“We’re looking at several sites and this is part of the process you go through,” Kruger said. “There aren’t any big financial commitments with.”
Asked whether Imperial has enough gas to underpin an LNG operation, he said the joint venture already has 340,000 acres in the Horn River basin of northeastern British Columbia and is now in the early stages of evaluating the resource potential of lands acquired in February’s takeover of Celtic Exploration for C$2.6 billion to buy shale acreage in the Montney basin.
Kruger said a pilot program at Horn River was started last year to assess resource quality and development costs and is now in the early stages of probing the Celtic resources.
Involved in an LNG joint venture with Japan’s Idemitsu Kosan, Calgary-based AltaGas said the partnership is actively targeting a startup of LNG and liquefied petroleum gas, LPG, exports as early as 2017.
Chief Executive Officer David Cornhill said the joint venture has the advantage of the Pacific Northern Gas pipeline, the only delivery system linking Western Canadian gas producers to the northwest coast.
AltaGas said its focus is now on consultations with First Nations and completing a feasibility study, permitting, regulatory approvals and facility construction.
Cornhill said his company sees investment opportunities of C$2 billion to C$5 billion, including expansion of the Pacific Northern Gas pipeline by 600 million cubic feet per day, to support LNG investment initiatives.
A pre-feasibility study of the Pacific Northern Gas additions has been completed, setting the stage for early discussions with First Nations and undertaking an environmental review process.
An LPG feasibility study, aiming for 25,000 barrels per day of exports, is scheduled for completion this year, with the LNG findings due in early 2014.
—Gary Park
