British Columbia closer to LNG reality
For Petroleum News
It’s one of the smallest of the 20 LNG projects floated for British Columbia, but it’s on the verge of giving Premier Christy Clark some of the ammunition she needs to seek re-election in May 2017 by allowing the province to enter the commercial LNG field.
The government loaded reporters on a chartered boat and a helicopter to deliver them on Nov. 4 to a “special announcement” about the Woodfibre LNG project near Squamish, a short distance north of Vancouver.
Clark and Woodfibre Chief Executive Officer Byng Giraud organized the elaborate event to announce that the privately owned company has the funding in place for a C$1.6 billion natural gas liquefaction plant which they hope will start exporting 2.1 million metric tons a year of LNG to Asia in 2020.
Not all pieces in placeBut not all of the pieces are in place and not all of the neighbors or environmentalists are enthusiastic about the plan.
And Clark is far short of her campaign promise in the 2013 election to have an initial LNG plant operating by 2015 and three by 2020, opening the door to 100,000 construction jobs and C$100 billion in revenue for the province.
Woodfibre, owned by Pacific Oil & Gas, which is part of the Singapore-based RGE Group, still needs to secure natural gas feedstock from northeastern British Columbia, obtain a permit from the B.C. Oil and Gas Commission and complete engineering develop cost estimates.
Even so, Giraud said “this project is a go.” Clark claimed First Nations leaders support the venture, but one community - the Squamish Nation - did not participate in the event, with Chief Ian Campbell saying “it is too early to celebrate” at a time when 25 conditions set by his community have yet to be resolved.
Two other aboriginal communities remain opposed to British Columbia’s environmental approval of a pipeline to deliver gas to the liquefaction plant, expressing disappointment that the province and Woodfibre have announced the project will proceed.
Just a ‘sound bite’?Mario Canseco, vice president of public affairs for polling firm Insights West, said Clark has seized the chance to deliver a “sound bite” by claiming her government “took action and a plant is about to be built. But it’s nowhere close to what she promised (for LNG),” he said.
Ed Kallio, an analyst with Calgary-based Eau Claire Energy Advisory, said the announcement was a “pretty big step” toward demonstrating that the Woodfibre board of directors was confident the elements were in place to proceed.
However, he warned that LNG economics are currently upside down, with commodity prices in Asia far below the project costs and unlikely to rise and stabilize before 2020.
Giraud countered that because Woodfibre is a private company it can “take a longer view” of its risks than big public companies which have quarterly obligations to shareholders.
My Sea to Sky, an environmental group, said the facility will damage the ocean environment and will emit about 800,000 metric tons a year of greenhouse gases, while the 60,000 metric tons of LNG aboard each tanker present a significant safety risk to nearby populations.