Canadian producers will have to cut the cost of their liquefied natural gas exports by nearly one-third to compete in an over-supplied global market, Woodside Petroleum CEO Peter Coleman told media during an LNG conference in Vancouver last week.
“It’s a difficult time to be in the marketplace for LNG,” Coleman said. “That means the cost structure here needs to come down by anywhere between 25 and 30%.”
British Columbia is aggressively pushing almost two dozen LNG megaprojects that are a cornerstone of Premier Christy Clark’s economic strategy. But B.C. is “vying with supplies coming onstream from Australia and the U.S., as Asian demand slows and the oil slump lowers LNG prices, reducing companies’ ability to fund major developments,” Bloomberg reports.
Canadian projects “will be challenged to maintain momentum the longer the oil price rout lasts,” Penty adds, citing Coleman.