Global en­ergy re­treat con­tin­ues with Asian firms scrap­ping Aurora LNG study

The Peterborough Examiner - - BUSINESS - GE­OF­FREY MOR­GAN

CAL­GARY – The Cana­dian arm of a Chi­nese state-owned oil com­pany can­celled plans for a multi­bil­lion-dol­lar liq­ue­fied nat­u­ral gas project on Canada’s West Coast on Thurs­day.

CNOOC Nexen En­ergy, the Cal­gary-based divi­sion of Bei­jing­based CNOOC Ltd., and its Toky­obased joint-ven­ture part­ner INPEX Corp. can­celled a fea­si­bil­ity study “and will cease all in­ves­ti­ga­tion ac­tiv­ity” on their pro­posed Aurora LNG project near Prince Ru­pert, B.C.

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. The com­pany said it will con­tinue to in­vest in its up­stream nat­u­ral gas pro­duc­tion in north­east­ern B.C.

Nexen spokesper­son Brit­tney Price said in an e-mail there would be “some im­pacts to our work­force over the com­ing months” but said the num­ber of peo­ple af­fected would be “min­i­mal.” She de­clined to pro­vide a spe­cific num­ber.

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 state-owned 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. That project would have ex­ported 19.2 mil­lion tonnes of LNG per year from Canada to Asian mar­kets.

“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.”

“For Western Cana­dian gas producers, who are a key part of our mem­ber­ship, mar­ket di­ver­si­fi­ca­tion and Pa­cific coast ex­port op­por­tu­ni­ties is an im­por­tant part of the fu­ture of this in­dus­try oth­er­wise we re­main tied to back­fill­ing nat­u­ral gas sup­ply in North Amer­ica,” Leach said.

He added that U.S. based LNG projects have been com­mis­sioned while Cana­dian pro­pos­als have idled.

SUP­PLIED PHOTO

CNOOC can­celled a fea­si­bil­ity study “and will cease all in­ves­ti­ga­tion ac­tiv­ity” on their pro­posed Aurora LNG project near Prince Ru­pert, B.C.

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