AltaGas Chairman and CEO David Cornhill, during a fourth-quarter earnings call, said a combination of factors were behind the decision to shelve further development on the project.
Cornhill cited poor economic conditions and global worsening energy price levels as two of the factors in the decision to halt the $600 million project. NG’s Daily gas Price Index reported that the consortium would not elaborate on when the markets would recover enough to revive the project.
The DC LNG consortium is made up of lead partner Calgary midstream processing and transportation firm AltaGas Ltd., and Japanese energy conglomerate Idemitsu Kosan, Belgian LNG specialist Emar NV and French global merchant EDF.
This latest pullout comes just a few weeks after Royal Dutch Shell announced it was postponing its decision on the $40 billion liquefied natural gas export project in Kitimat, B.C. “likely” until the end of this year, according to Digital Journal.
Not only has this latest development crushed the B.C. government’s hopes of seeing three LNG export plants in operation by 2020, it has also badly damaged the hopes of the Haisla First Nation in the region. What had appeared to be a “mini-boom,” spurred on by spending on development work for the LNG industry has now trickled to a halt.
“It’s really the manifestation of market conditions,” AltaGas executive vice-president John Lowe told the Vancouver Sun. “We could not secure a customer at any price that would cover our costs.”
CBC Canada is reporting that the Minister of Natural Gas Development, Rich Coleman says the news doesn’t mean B.C.’s LNG industry is in trouble. “I don’t think so,” Coleman said Thursday.
“I think we’ve got some significant FID discussions taking place in the next 60-90 days on a couple of projects. Obviously, there’s been two that have told us they want to get to their FID by the end of this year…and they’re much larger. This was a very small project.”
The Douglas Channel project was one of the smaller of 20 proposed LNG projects in Canada. The DC LNG project had the potential of exporting about 2.4 billion cubic meters of natural gas per year, compared to the Royal Shell project that would have exported 33 billion cubic meters a year.
