A group of investors led by Royal Dutch Shell has once again postponed its investment decision on a $40-billion liquefied natural gas (LNG) terminal in British Columbia, citing “global industry challenges, including capital constraints” in a statement earlier this week.
“Participants have determined they need more time prior to taking a final investment decision,” said the LNG Canada group, a consortium that also includes Mitsubishi Corporation, PetroChina Company Ltd., and Korea Gas Corporation. “At this time, we cannot confirm when this decision will be made.”
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“The whole global LNG industry is in turmoil,” said LNG Canada CEO Andy Calitz, although “I’m confident that the Japanese market remains available to LNG Canada.”
The announcement was the latest in a series of hits to Premier Christy Clark’s previous election promise of economic prosperity built on a boom in LNG exports. With the next provincial vote coming up next year, and not a single LNG project in production, industry has been warning for months that the government is running out of time to deliver on its plan, while low-carbon analysts accuse B.C. of shifting from climate leader to climate laggard.
Clark “campaigned hard during the 2013 provincial election on the prospect of a booming LNG sector, boasting that her Liberals would guide the fledgling industry and transform the provincial economy,” the Globe and Mail recalls in its coverage of the LNG Canada announcement. Now, “industry experts say the weak state of the LNG industry is casting doubt on all 20 proposals to export LNG from British Columbia.”
The Shell consortium’s decision will also delay construction of TransCanada’s $4.7-billion Coastal GasLink pipeline from northeastern B.C. to Kitimat, the paper notes.
In the Vancouver Sun, First Energy Capital Corporation Vice-President Martin King said the latest setback “just creates a dark cloud over what is already a bunch of dark clouds for that type of economic activity.” But University of Victoria social policy professor Michael Prince said the LNG collapse might not hurt Clark in the election.
“I don’t think this will be the ballot box issue in May 2017,” he told the Sun. “I would expect it to be part of an NDP campaign to challenge the credibility or the believability of other claims or promises made by the governing party.”
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