Petronas puts the brakes on liquefied natural gas terminal near Prince Rupert
Petronas says it’s delaying its proposed liquefied natural gas terminal near Prince Rupert.
The Malaysian energy giant says although it has resolved its concerns with the BC government, the conditions aren’t right to proceed.
Petronas says the economics of the project don’t work as costs remain high and oil prices have dropped below US$70 a barrel.
The total investment of $36 billion covers the LNG plant, shale fields in northeastern BC and a pipeline to connect the two.
Despite the delay, both the company and the BC government struck a positive tone, expressing optimism the project will eventually proceed.
Premier Christy Clark says the province’s plans to build an LNG industry are still on schedule.
Edward Kallio with Ziff Energy Group says the provincial government made a serious mistake when it took two years to come up with a different tax structure for the LNG industry.
“Some of the projects, including Petronas would’ve been further along with their final investment decision. They may have already taken one on this project. Now, conditions have changed. We’ve got an oil correction.”
He says there’s a lot more competition now in the LNG market.
“The market starts getting taken away by US competition, some Australian competition, African competition. The market doesn’t stand still just because British Columbia says they want a BC export tax.”
