Thursday, 21 February, 2019

Mitsubishi Corporation Reaches Final Investment Decision on LNG Canada Project

Promoting the sale of LNG at a trade fair Promoting the sale of LNG at a trade fair
Theresa Hayes | 05 October, 2018, 16:22

LNG Canada has asked Canadian courts to waive the tariffs, saying domestic suppliers can not assemble or transport the modules cost-effectively.

Mr. Horgan's government will release a new climate action plan later this fall that will count expected emissions from the LNG project of 3.4 megatonnes of GHG emissions annually.

"Our Caucus has been clear that we do not support the government's LNG regime".

"LNG exports and exports to Mexico by pipeline are projected to grow substantially, with LNG exports bringing the environmental benefits of our low carbon emissions to overseas customers, while providing jobs, economic benefits and stability to the USA market", Jenkins said. "The LNG Canada project is a beneficiary of how we used to do things".

This project is expected to generate about $23 billion in revenue for B.C. over 40 years, which the provincial government says will be invested in health care, schools, child care and other key services.

"Today's record C$40 billion investment by LNG Canada shows that balancing our economic, environmental and reconciliation priorities is possible", Horgan tweeted.

"The capex requirements of the Canadian LNG project do not put pressure on (Royal Dutch Shell's) ability to provide returns to shareholders but we think it signals an effort to re-build a strained portfolio and question how compelling the economics are", Citigroup analyst Alastair Syme wrote in a research note.

Mr. Horgan said in an interview that the targets can still be achieved - but it will require reductions from industry, transportation and home heating.

Electric sector demand is expected to increase by 0.7 Bcf/d as new gas-fired capacity replaces retiring coal plants.

Meanwhile, Prime Minister Justin Trudeau said the LNG Canada announcement represents the single largest private sector investment project in Canadian history.

Gas traditionally sells for more in NY because it's closer to major population centres but the difference has been widening recently due to pipeline capacity constraints in Alberta and B.C.

Gas for the new LNG terminal will come in part from northeast B.C. Meanwhile the inability to get Alberta oil out of the country has contributed to a discount of about $41 of Canadian to the USA oil.

"(LNG Canada) is something which is definitely a positive sentiment boost for the industry", King said.

The Sierra Club of B.C. says "credible estimates" of emissions from the project range from 8.6 to 12 megatonnes, and at that rate, the project can not fit into the province's climate action plan.

Royal Boskalis Westminster said it would carry out dredging work for the project under a contract worth about €100 million (US$115 million).

Weaver declined to comment on this article before the investment is officially announced.

Horgan's minority NDP government only governs because of the support of the Green party.

An expected shortage by the end of this decade prompted the massive wave of investment in Australia and the United States in the past few years, but the market view then swung 180 degrees and a surplus was expected by the early 2020s.

"I don't see it as a case of replacing US cargoes, more about meeting projected demand growth", said Wood Mackenzie analyst Nicholas Browne.