Exxon Mobil shelves $25B LNG project planned for northern B.C.
Exxon Mobil Corp. has withdrawn its environmental assessment application for a $25-billion LNG export facility on the B.C. coast it proposed in 2015.
The apparent shelving of the WCC LNG project is the latest blow to the West Coast liquefied natural gas export industry, which at one time featured about 20 proposals, but has resulted in only one firm commitment to build.
Exxon Mobil and its Canadian partner, Imperial Oil Ltd., had proposed the project for Tuck Inlet in the Prince Rupert area on B.C.’S north coast. The export project was planned to have liquefaction and storage facilities for natural gas, loading facilities and a third-party pipeline.
Global LNG demand is expected to double to 550 million tonnes per annum by 2030, as countries like China move away from coal to cleaner fuels, Reuters reported, with the top import market for LNG being northeast Asia.
Exxon’s West Coast Canada (WCC) LNG export project was expected to produce around 15 million tonnes per year of LNG to serve Asian buyers, with plans for further expansion up to 30 million tonnes per year.
Company spokeswoman Julie King said Exxon Mobil and Imperial withdrew the WCC LNG project from the environmental assessment process after careful review.
“We remain committed to our Canada operations and to ensuring the safe and reliable delivery of oil and gas to our customers,” King wrote in a brief email.
Exxon has been “taking advantage of opportunities as they become available to invest, restructure or divest assets to strengthen our long-term competitive position and provide the highest return to shareholders,” King told Reuters.
She didn’t say why the application was withdrawn.
The move was confirmed in a one-sentence update on the website of the B.C. Environmental Assessment Office.
Exxon’s decision signalled it is concentrating on LNG projects with Qatar Petroleum and a proposed expansion of its chilled-gas operation in Papua New Guinea, Jason Feer, head of business intelligence at Poten & Partners, LNG tanker brokers and consultants, told Reuters.
“They have got a pretty robust pipeline of liquefaction projects globally. It would be natural to review that and see which would be competitive,” he told the agency.
Earlier this year, Calgary-based Imperial took a writedown of $289 million on its northern B.C. Horn River shale gas development, a 5050 venture with Exxon that was once expected to become a major supply source for B.C.’S LNG industry.
In October, Royal Dutch Shell and its partners announced final investment approval for the $40-billion LNG Canada project, including a gas liquefaction plant in Kitimat on B.C.’S coast and a 670-kilometre gas supply pipeline.