When "prudent" becomes "pause": BG to delay LNG project


#1

The BG Group confirmed on Wednesday that they will be taking a “pause” on their proposed Prince Rupert LNG project.

Our latest item on the North Coast Review features details from a conference call transcript that addresses the Prince Rupert situation.

See more on the developments

northcoastreview.blogspot.ca/201 … pause.html


#2

CALGARY - The chairman of British energy firm BG Group says it’s hitting the pause button on its proposed liquefied natural gas project near Prince Rupert, B.C.

On a conference call to discuss BG’s third-quarter results, interim executive chairman Andrew Gould says the company isn’t abandoning the project.

But he says there’s a risk the market will be well supplied past 2020, so BG is waiting to see how conditions evolve.

Gould says estimated volumes out of the United States are looking to be higher than previously expected and pricing is generally weak.

BG says its proposed project would be developed in two phases, eventually reaching a production capacity of up to 21 million tonnes per year.

BG’s proposal is one of 18 planned for Canada’s west coast that would chill natural gas into a liquid state, enabling it to be shipped across the Pacific by tanker.

© Copyright Times Colonist


#3

Well that is shitty news for Prince Rupert for sure.

Hopefully some of the other proposals move forward.


#4

people really don’t think that fuel prices dropping will affect the LNG projects ? lol Just like the price of coal and our shortage of coal shipping this year as well.


#5

It’s not a verically integrated proposal. They have to buy LNG, convert it and sell it to a market. That is a disadvantage compared to what Petronas is proposing, who own their own naturla gas supply, and as a state corp. don’t have many investors poking their nose in to company business (voters tend to be the last to know).


#6

You are 100% correct on that. This is why the Petronas project has always been considered the most “viable” project for the Prince Rupert Area, despite it being announced after the BG Group put forth their Ridley Island LNG ideas.

Petronas can use this LNG terminal to supply their own state-demand natural gas in Malaysia. Furthermore, they have also secured ownership partnerships with SINOPEC (China) at 15%, JAPEX (Japan) at 10%; Indian Oil Corp (India) at 10% & Brunei Petroleum (Brunei) at 3%. The deals include purchase agreements with each agreeing to buy LNG at the percentage of ownership, with options to purchase more from the Petronas/Malaysian share at Petronas’ discretion.

With the 5 owners, the Lelu Island project already has a built in customer base in Malaysia, China, Japan, India & Brunei…this is something that did not exist with the BG Group project…and is a huge reason why industry experts expect the Petronas project to move forward. Really, only 3 projects proposed in BC have foreign deals in place (LNG Canada in Kitimat, PNW LNG in PR and the smaller one proposed for Squamish).

We shall see, by the end of the year (or sooner) we will know for sure.

If just the Petronas project goes forward, that alone will be the biggest invested project Prince Rupert has ever seen, more than all of our previous and existing industrial projects (Fairview, PRG, Ridley Coal, Pinnacle, Pulp Mill ect) combined by a wide margin.


#7

This certainly will affect LNG producers who must sell to market (like BG Group), but not necessarily for LNG producers who control their own demand like Petronas.

I imagine the softening Asian natural gas market is going to affect the timeline of other Prince Rupert area proposals from LNG producers who sell to market.


#8