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BC sparks LNG interest
The British Columbia government has attracted a strong international response to its offer of land for an LNG terminal near Prince Rupert.
A month-long call for expressions of interest, EOI, generated four new proposals, which the government is now evaluating to determine how many qualify for use of the site.
If projects go ahead, the land at Grassy Point, 18 miles north of Prince Rupert, would be the province’s third location for LNG terminal clusters after the deepwater ports at Prince Rupert and Kitimat.
The eligible EOIs were submitted by:
•Nexen, which is now owned by China National Offshore Oil Corp., in partnership with Japan’s Inpex and JGC, a Japanese-based engineering company.
•Australia’s Woodside Petroleum which has disclosed it is looking for a potential partnership to enter Canada’s emerging LNG sector.
•Korea-based SK E&S, a multi-utility player in northeastern Asia’s gas and electricity business.
•ExxonMobil and its 69.6 percent owned Imperial Oil, who have been pressing ahead with LNG plans since acquiring natural gas producer Celtic Exploration last year.
Plans date from 1979 The government offered the Grassy Point land because of preliminary interest in the site, but it said no final decisions have been made on how much will be made available or whether it will be sold or leased.
Plans for an LNG terminal at Grassy Point were initially started in 1979 by Dome Petroleum which was forced to withdraw in 1984 because of financial difficulties. That project was designed to supply 2.35 million metric tons a year of LNG to Japan over 20 years.
Plans included a C$500 million pipeline, C$2 billion gas liquefaction plant and a C$1 billion fleet of Japanese-built LNG tankers.
Mobil Oil and Petro-Canada then made an unsuccessful attempt to negotiate agreements with LNG sellers and buyers to use the same location.
Experience, plans required Participants in the EOI were asked to outline their LNG experience, their financial ability to build an export facility and identify where they would obtain natural gas supplies as LNG feedstock.
They were also required to provide project descriptions, what plans they have to consult with First Nations and other communities in the Grassy Point area and their potential to work in collaboration with other companies.
The government said that once its evaluation work is completed, successful proponents will “be in a position to move forward with final planning and investment decisions.”
Before its takeover by CNOOC, Nexen was the 60 percent operator and Inpex held 40 percent of a partnership that was conducting a joint feasibility study to develop natural gas properties in the Horn River, Cordova Embayment and Liard shales of northeastern British Columbia for LNG feedstock.
ExxonMobil and Imperial have assembled a combined 334,000 acres in the Horn River play, plus the Celtic assets, which Imperial CEO Bruce March told an investment conference earlier this year the joint venture is “anxious to scale up.”
He said the Celtic reserves “would be the underpinning of a potential LNG strategy” that would draw on ExxonMobil’s global LNG experience and ties to prospective customers.
Woodside, which operates six of the seven LNG processing trains in Australia, is examining possible deals in North America as an alternative to Australia’s LNG sector, which is faced with rising capital costs, CEO Peter Coleman said in February.
He said that although British Columbia is counting on as many as seven LNG projects and the province has an estimated 200 trillion cubic feet of gas in shale formations, it “doesn’t really have any material hydrocarbon production (and) is still learning.”
—Gary Park
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