Conference board makes bullish forecast with LNG

“We thought since we were doing a forecast, it would be a good idea to show the impact on the province if it does go ahead.

MARIE-CHRISTINE BERNARD

CONFERENCE BOARD OF CANADA

British Columbia will continue leading Canadian economic growth over the next two years, the Conference Board of Canada is forecasting, presuming that the petroleum giant Petronas gives the go ahead to its $11-billion liquefied natural gas export terminal in Prince Rupert.

A 2016 start to that project isn’t a certainty, said the conference board’s Marie-Christine Bernard, but its proponents remain optimistic so the agency thought it was appropriate to indicate what kind of impact it would have on the economy.

The boost the Pacific North-West LNG plant would give to B.C.’s construction, service and upstream gas drilling sectors could account for a full percentage point of the 3.6 per cent growth the Conference Board estimates for the province in 2016, said Bernard.

“There’s not a guarantee that the project will go ahead as planned,” said Bernard, “and the timing is also another question, but we thought since we were doing a forecast, it would be a good idea to show the impact on the province if it does go ahead.”

Petronas, Pacific North-West LNG’s lead proponent, gave a provisional final investment approval to the project last June, subject to the province giving a final project agreement and the conclusion of its federal environmental review with an approval by the new Liberal cabinet.

The $11-billion plant is one component in what Petronas bills as an overall $36-billion investment in Canadian LNG, which also includes a $5-billion pipeline and upstream natural gas drilling by Progress Energy. The Canadian subsidiary has been spending up to $2 billion a year in ramping up its potential for production.

Recent news about a global glut of LNG has cast a shadow over B.C.’s prospects, but Petronas CEO Datuk Wan Zulkiflee Wan Ariffin said, as late as mid-November, the company will proceed pending federal approval, the Malay Mail reported.

The PNWLNG project would push B.C. well ahead of Ontario and Manitoba, the next-strongest growth leaders in the conference board’s forecast.

Without the LNG proposal, B.C. “would still remain the strongest province in Canada,” Bernard said, with 2.6-per-cent growth, compared to 2.5 per cent in Manitoba and 2.3 per cent in Ontario.

Overall, Canadian economic growth is expected to pick up momentum, especially in traderelated sectors.