Global energy retreat continues
Asian firms scrap LNG project plan
The Canadian arm of a Chinese state-owned oil company cancelled plans for a multi-billion-dollar liquefied natural gas project on Canada’s West Coast on Thursday.
CNOOC Nexen Energy, the Calgary-based division of Beijing-based CNOOC Ltd., and its Tokyo-based joint-venture partner INPEX Corp. cancelled a feasibility study “and will cease all investigation activity” on their proposed Aurora LNG project near Prince Rupert, British Columbia.
A press release from the partners blamed “the current macro-economic environment” for the cancellation, saying it does not support the development of a large LNG business on the West Coast. The venture’s proposed timeline had pegged 2020 as a planned start date for construction on the project, which would have exported 24 million tonnes of super-cooled gas per year to Asian markets.
“We are disappointed in this outcome, Aurora LNG is proud of its work in northwest British Columbia over the past three years and the relationships it has built with local community members, Indigenous groups, stakeholders and government,” a release from Nexen said. It said it will continue to invest in its upstream natural gas production in northeastern B.C.
Nexen spokesperson Brittney Price said in an email there would be “some impacts to our workforce over the coming months” but said the number of people affected would be “minimal.”
The announcement is the latest in a string of project deferrals and cancellations and another setback to Canada’s once-promising LNG export industry. Malaysia’s stateowned oil company Petronas announced in July it would not proceed with its $36 billion Pacific Northwest LNG project, which had also been sited near Prince Rupert.
“I think Canada and regulatory authorities, we need to reflect very hard on what these decisions, one after another, tell us about our competitiveness,” Explorers and Producers Association of Canada Gary Leach said, adding the announcement “is not good for overall investors views of Canada.”