B.C.’s LNG outlook dims

The dream of a booming liquefied natural gas industry in British Columbia appears to be fading, at least for the foreseeable future, after Petronas and its partners scrapped a $36-billion megaproject in the province, experts say.

A consortium led by Malaysia-owned Petronas announced Tuesday it would not proceed with the Pacific NorthWest LNG project near Port Edward, B.C., due to an “extremely challenging environment” brought on by prolonged low prices.

The project would have included a natural gas export terminal on Lelu Island on the province’s northern coast and a 900-kilometre pipeline to bring the natural gas in from northeastern B.C.

The proponents of two other major projects, Shell-backed LNG Canada and Chevron’s Kitimat LNG, say they are proceeding toward final investment decisions, but analysts predict the facilities are unlikely to be built in the next three to five years - if at all.

“I’d say it’s a pretty low possibility. It’s not quite zero, but the Shell LNG project is also a very big, expensive greenfield project,” said Martin King, vice-president of institutional research at GMP First Energy.

Shell, along with PetroChina, KOGAS and Mitsibushi, have formed a joint venture company called LNG Canada that has proposed an export terminal in Kitimat on B.C.’s north coast. It indefinitely delayed making a final investment decision in July 2016.