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Is The Canadian LNG Export Dream Dead?
Submitted by Nick Cunningham via OilPrice.com,
Lower oil prices have killed off major plans for liquefied natural gas exports from Canada’s west coast.
On December 2 the state-owned oil company of Malaysia, Petronas, decided to shelve plans to build an enormous LNG export terminal in British Columbia, citing the falling price of oil. It is common for LNG contracts to be priced using a formula linked to the price of crude oil, so declining oil prices pushes down prices for LNG.
Petronas’ Pacific NorthWest LNG, as it was known, was a proposed $32 billion export terminal that would send LNG to Asia. The decision highlights how competitive global LNG trade has become, despite growing demand. Greenfield projects, such as Pacific Northwest LNG, face steep startup costs that become prohibitive when oil prices fall.
Although low oil prices may have been the icing on the cake, Canadian LNG projects were facing serious obstacles before oil prices plummeted. There is stiff competition from a slew of LNG projects already under construction in the U.S. and Australia, which will come online much earlier than anything from British Columbia.
Several LNG export facilities in the U.S. are not starting from scratch, for example. The Sabine Pass terminal on the Gulf Coast and the Cove Point facility on the Chesapeake Bay were both originally constructed to import LNG rather than export. The original facilities were put on ice when the U.S. no longer needed LNG imports. Now, companies are retrofitting them to handle exports – a much cheaper process than building a new facility.
The indefinite cancellation of Pacific NorthWest LNG is a major setback for Canada’s plans to export natural gas. The move comes after BG Group abandoned plans to build a separate LNG export terminal on Canada’s west coast. Chevron is also in limbo with its Kitimat LNG project after its partner Apache pulled out.
The inability to break ground on a series of LNG export terminals is also a major blow to the province of British Columbia, which has banked on natural gas exports to meet certain budget objectives. B.C. Premier Christy Clark was originally very bullish on the industry, telling constituents that the province could become debt-free as a result of exports.
In 2013, Clark predicted that a full-fledged LNG export industry would be up and running by 2020, which would bring in $4.3 to $8.7 billion each year for the province. But her government made major concessions on taxes after several companies wavered on final investment decisions. Petronas even threatened to cancel its project because of proposed tax rates. In October 2014, Clark’s government proposed a 3.5 percent LNG tax, half of the original proposal.
The move was intended to offer a more attractive investment climate yet it was not enough to overcome high costs and falling oil prices.
The LNG market has dramatically changed since the B.C. government made its 2013 budget projections. Along with lower oil prices, the demand for LNG in Asia – the target market for Canadian exporters – looks quite a bit softer than it once did.
Japan is inching closer to a restart of its nuclear reactors, and as the world’s largest LNG importer, that could put a dent in demand. China’s economic growth is lower than expected, slowing the rise in energy consumption. And in what may have been unimaginable in 2013, China inked two major natural gas deals with Russia this year. If the deals are completed and the pipelines constructed, Russia could end up providing China with 17 percent of its natural gas needs by 2020. All of these trends narrow the market for Canadian LNG.
CBC News described British Columbia’s Premier Christy Clark as having an “almost singular focus” on LNG, but her government will need to find another silver bullet to fix provincial debt with LNG off the table for now.
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You won't build that.
LNG is a marginally profitable business, not a blockbuster. Everyone looks at USA nat gas price of $3.50 and Asian LNG for $13.. this is part of the story. The real story is the cost of the logistics and it is a lot more expensive to liquify and re gas than you think
And very fragile and vulnerable to geopolitics and price fluctuations of pipeline gas. So with the high cost of upfront investment into LNG infrastructure will it ever get off the ground?
Canadian LNG is a joke. Who are they going to supply, Tijuana? Costs of shipping to the pacific rim are prohibitive, despite every dirty trick played by Canada to discredit Russia. Russia will build pipelines to Asia, Canada will suck hind tit.
Besides, Canada used to have some attractive women prior to fast food, but now they resemble the typical fat american female. At least Russian girls still look good, especially I hear from Siberia.
http://forum.bodybuilding.com/showthread.php?t=125267141
Besides, Canada used to have some attractive women prior to fast food, but now they resemble the typical fat american female. At least Russian girls still look good, especially I hear from Siberia.
Montreal is well known among the top cities for hottest women..
http://www.therichest.com/rich-list/most-popular/10-cities-with-the-hott...
http://www.travelersdigest.com/228-beautiful-women/
Sorry, I was thinking in terms of the east coast porkers and west coast grunge girls.
Montreal is really not canada, and has lots of hot women. When I lived in NY state, I used to visit the clubs regularly.
Moreover, you have to love a city whose tourist board promotes swinger cruises on the weekends.
http://www.montrealplus.ca/montreal/venues/montreal-sexy-boat
Otherwise, my comments stand.
The Canadian LNG export dream was never alive.
Poltava is #1
You stand on the street and they will walk by
Kherson, Maripol,these regions Donbass and Odessa. Crimea
but as go east Ladies are more stable, down to earth..
Novgorod is vikings tall blondes. Most strong and adventurous of Northmen genetics stayed there.
Siberian is best wife.
Siber Ladies make best wives of any.
They will take care of you.
Latina: The only time I ever look at women these days is when I read ZH and see your avatar. The biggest issue I have with ALL women is that my titties are usually much bigger than theirs. No competition... I'm dead sexy!
As for Montreal, I've been there on more than a few occasions. Most of the women were nothing special in the looks department (not ugly, just average) but talking with them was like getting a verbal blowjob.
You've probably never seen a real Canadian farm girl that wears no makeup or other bullshit, or requires tons of extra stuff to go on a 3 day camping trip. I'm too fucking old to do anything but I still enjoy the view of natural beauty. I've seen some spectacular examples of women who don't need the face paint during my grumpy existence. Beauty is a state of mind... you either have it, or you don't.
LNG facilities are a middleman and right now there's not much of a middle. If things weren't so screwed up in the economy it would be built on future expectations but the future is looking pretty shaky all around.
from TFA:
Should have left them on ice for a few more years, because there won't be enough natural gas to liquefy and export when those facilities are finished.
But hey, that's cool, because after those companies go tits up, the terminals can be bought for pennies on the dollar and turned back into LNG import facilities.
Moose ate the market...but milk and cookies will fix it. Long lactose intolerant moose gas!!
RIPS
Thats ok, who needs oil when you got superb housing market. Canada can export it....right.......right.....
If you like your non-profitable energy scam, you can keep your non-profitable energy scam.
In the process of changing her name from "Christy" Clark to "Crispy" Clark.
Screw that witch. She denied her neighbors in Alberta the right to build a pipeline to the West coast, so that they could sell their oil to the Chinese, or anybody else in Asia. Things got so bad that the two girls (Alberta premier is also a woman) won't even talk to each other. Now, her beloved golden goose got killed. Karma is a bitch !
Canada is sliding into the shit abyss along with everyone else, but many Canadians refuse to admit it
"What's a shit abyss Mr. STG?" lol +100 Its true. Nobody seems to see the shit abyss you speak of in Canada. Almost untouchable, as it were.
But,
its coming. And it will be overnight when it does, as has happened at least 5 times before by my count.
Canadian?
repost
There's a few reasons why the Chinese have been pouring hundreds of billions into the Greater Vancouver region over the past decade.
The Chinese were pouring money into the lower mainland to buy residency status. That changed last Spring as did the flow of money. I have a lady friend in Vancouver who is is a high end real estate broker. They are very concerned there about the more expensive real estate values.
Its good for Canada to have low oil prices and low Canadian dollar and very bad for Russia. Because you know..............they said it on the news this morning.
It was a stupid dream anyway.
no reason to export anymore. have a look around Vancover, the Chinese OWN the place. They have already moved in.
you are so anti-Chinitic
That they do, maybe they can start to export Canadians back to China
LoP: Yes, they've been buying everything there for years now. I used to live there for several years in the early 2000's and it was a rush to buy everything back then. Price did not matter, which is why a shithole vacant lot was selling for dumbfuck prices.
China itself is a major oil and natural gas producer too. They already produce the most coal in the world....and many of those mines are now in-economic. The amount of steel they're pumping out in China is truly out of this world too. Saw a Chevy Cruze new for under ten grand for 2014. Good luck competing with that car.
http://peakoilbarrel.com/bakken-sweet-spots-petering/#more-5238
Are early investors Bakken out?
Another benefit for Putin, and more incentive for Greater Israel to sacrifice some more Goy to get their pipeline route through Syria.
An American, not US subject.
You mean FROM Russia, through Turkey and Syria, TO Israel?
The only other viable and rational route from the ME to Israel would be via KSA and Jordan. All else is fantasy.
This route would certainly allow the Zionists in Israel, who backed the Ukraine junta, to cease and desist, or cause their countrymen to reign them in with such a Game Changer.
With some research you will find that Israel has found massive amounts of gas off their shared shore. Shared with Gaza and Lebanon. They need a route to Europe, and Syria is better than Lebanon as a route because:
1) Syria is also the bread basket of the Middle East.
2) Has water rights and damns.
3) Connects to the other part of Greater Israel that lies in what is today western Iraq.
Lots of birds with one stone; lots of dead too.
One can expect the invasion and destruction of Lebanon soon, as why share when you can kill a bunch of people and not have to; and gain access to the waters of the Litani as well.
See, more birds with one stone; and also lots of dead too.
An American, not US subject.
"For some the land is theirs to live on and off of--sustenance. For others the land is theirs to steal and kill on--Lebensraum."
They're gonna make it up here:
http://rt.com/news/212475-canada-military-police-ukraine/
Moar War!
Poor Canada - infested by both Zionists and Ukrainian Nazis.
Poor Canada. So close to the US and so far from Scotland.
Canada has been banking on $100 oil in perpetuity. Their entire economy and free healthcare depends on it. Welcome to the global shit storm Canada.
Canadians had socialist health care long before oil dependency, and it will continue no matter how shitty it is. Tar sands projects well over ten years old now, built and operating when oil was as low as $35-$40 a barrel. I think your comment is slightly off base.
I agree there is a shit storm headed in the Canucks direction, however I believe it will be endured much better than other nations.
Just say'n
The tar sands need a mean oil price of about $70. Some are viable at lower prices and all operations have benefit from low naural gas prices (used in copious quantities to extract bitumen) as well as the stronger (US) dollar. Below $70 and you will see new developement stop and smaller operators fold up.
The big syncrude plant and a handful of others will run because it is cheaper to do so at a loss than mothball everything and lose your skilled labor.There are also delivery contracts that must be met.
One of my clients manufactures oilfield equipment in Montana and he told me nearly all new projects in northern Alberta have been shelved except where they were close to completion. He is very concerned about how lower prices will effect fracking and his own business.
Ladder anyone?
https://www.tradingview.com/x/RS2hHaof/
Sit on it and wait for prices to go back up.
Canadians deserve everything they get, even more so than Americans.
Most Canadians I talk to think that their shit doesn't stink. They have this ridiculous notion that their banks are sound and their financial sector is free of corruption.
That's quite true and I'm a Canuck. No one has the foggiest clue that just CIBC and RBC took ~$130 b in bailouts 2008. They still think NDP and CP are different. But then Amereicans think Liberals and Republicans are different too.
Seems like Christmas and Buffet came early this year:
With no pipeline to BC and no Keystone, it looks like whatever oil that comes from Alberta to the US will be via Warren's trains. Choo choo!
400k bbls a day go to the BP refinery in Gary IN via a pipeline. They are building another next to it to double the flow right now.
Conspiracy Fact: UN reports confirm Israel aiding ‘rebels’, Al-Qaeda groups fighting in Syria
Instead of exporting LNG to Asia, Canada can import even more excessive biomass from Asia.
Hey, what a coincidence! I just shorted Chenierre today.
LNG. $27 bb market cap, $9 bb debt, sales like $300 mm.
Oh, and insiders have sold some 22% of their stock.
All levels of government and the big shots in the oil and gas business made one big mistake;they never listened to what First Nations Peoples in Canada had to say and they never wanted this crap disturbing their environment.They just want to hunt and fish and live their lives in peace like their ancestors did.Harper and Clark and the rest of the white estabishment thought they'd come in and con, brainwash and railroad native peoples with their fucking bullshit.It hasn't worked.That shows you the attitudes of phoney ass-kissers like Harper.Afghanistan was a failure and so was his ass kissing of Obama's black ars in order to push Keystone through.
You infuriatingly ignorant fuck.
"Although low oil prices may have been the icing on the cake, Canadian LNG projects were facing serious obstacles"
What you meant was 'the straw that broke the camel's back', unless of course you like icing on your turds. Prick.
Kevin Annett: Pope meets secretly with Russian, Dutch diplomats on BRICS bank & Dutch Queen coverup
http://www.youtube.com/watch?v=nbw8ksjjhf4 (32:29)