With British Columbia about to release tax legislation and emissions regulations for its liquefied natural gas (LNG) industry, some of the companies at the centre of the LNG boom are threatening to abandon their projects.
Late last month, iPolitics reported that the Malaysian state oil company, Petronas, was set to walk away from a $10 billion project in northern B.C. due to regulatory delays, an impending LNG tax, and insufficient incentives. “Rather than ensuring the development of the LNG industry through appropriate incentives and assurance of legal and fiscal stability, the Canadian landscape of LNG development is now one of uncertainty, delay, and short vision,” said Chief Executive Shamsul Abbas.
Tertzakian, Chief Energy Economist at ARC Financial Corp., warns that Petronas and others may not be bluffing. “Watch for it: More oil and gas megaprojects will be cancelled,” he writes. “The overriding trend is that investors are shying away from shovelling money into the dark abyss of long-term, multibillion-dollar megaprojects that have only two guarantees: higher-than-expected costs and delayed startup.” (h/t James Munson/iPolitics for pointing us to Tertzakian’s analysis)