Experts Divided if Canada’s Export Business to Asia is Stalled
By Heather Douglas
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.” Charles Dickens, (1812 – 1870), A Tale of Two Cities (published 1859).
The headlines told the dark story.
“Today is a very difficult day for Pacific NorthWest LNG and Petronas,” said Pacific NorthWest LNG chairman Anuar Taib. “We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry have led us to this decision.”
Canada has deliberately turned its back on exporting LNG from the richest liquids basin in Western Canada – the Montney. Why has the propane industry, the gas producers and processors, and even the Canadian Association of Petroleum Producers (CAPP) allowed provincial politics to shut down this lucrative new sector and decide against capitalizing on the quickest way to trade gas?
The timing of the cancellation is more than a little suspicious, coming just eight days after NDP Premier John Horgan was sworn into office, supported by an agreement with the B.C. Greens. Too many people stood by during the recent election and ignored his anti-industry, anti-LNG, anti-Pacific Northwest project, and anti-pipeline rhetoric, not believing he would act on his election promises. Once elected, Premier Horgan demanded higher carbon taxes, a “fair” return for resources, and better partnerships with Indigenous Peoples.
This cancellation will probably strand B.C. LNG projects for many years. Sadly, some experts predict this may even shut Western Canada out of this market permanently, especially if Royal Dutch Shell and Woodfibre LNG both decide to axe their projects before year-end.
TransCanada Corporation (TSX:TRP) immediately issued a statement from Karl Johannson, executive vice president, Canada and Mexico, natural gas pipelines and energy. “With this news, we are reviewing our options related to our proposed Prince Rupert Gas Transmission (PRGT) project as we continue to focus on our significant investments in new and existing natural gas infrastructure to meet our customer’s needs. As part of our agreement with Petronas affiliate, Progress Energy, following receipt of a termination notice, TransCanada would be reimbursed for the full costs and carrying charges incurred to advance the PRGT project. We expect to receive this payment later in 2017.”
Versus — it was the Spring of Hope
The only ray of light in this otherwise dismal scenario is the fact AltaGas Ltd. (TSX:ALA) continues to soldier on with its Ridley Island Propane Export Terminal (RIPET). This spring, the company announced it had signed a joint venture with Royal Vopak, taking a 30 per cent interest in the project. Eelco Hoekstra, chairman of the executive board and CEO said at the announcement, “Storage and handling of gas is an important strategic focus area for Vopak. We are confident that we have found a strong partner in AltaGas that is a well-respected Canadian company with experience in developing energy projects.”
The RIPET site is near Prince Rupert,British Columbia, on a section of land leased by Ridley Terminals Inc. (RTI) from the Prince Rupert Port Authority. The site has a locational advantage given very short shipping distances to markets in Asia, notably a 10-day shipping time compared to 25-days from the U.S. Gulf Coast. The brownfield site also benefits from railway access and ample deep water access to the Pacific Ocean which is ice-free year-round. Separate from RIPET, Vopak has additional land rights on Ridley Island. Vopak and AltaGas will explore the potential to expand their relationship on Ridley Island.
According to David Harris, AltaGas’s president and CEO, the company has significantly advanced construction on its three major gas projects – Townsend IIA, North Pine, and RIPET. “At RIPET, construction is moving at a very swift pace. The storage tank is approximately 35 per cent complete and all major equipment has been ordered. The great work being done here keeps us on track for a Q1, 2019 on-stream date.”
Furthermore, Harris is proud to say First Nations and the B.C. government are firmly behind the company’s projects. “Their support has allowed us to advance these projects ahead of schedule. We’re excited about the remainder of the year. As we work toward the completion of our major construction projects and we build on the momentum of our solid results to date, we maintain a strong focus on our potential growth opportunities, including a further build-out of our NE B.C. strategy on the gas side.”
It’s too soon to predict whether or not this is actually the “best of times or worst of times” for Canada’s industry.
#Altagas #LNG #WesternCanada #Canada #Montney #gas #producers #CAPP #RIPET #Vopak #theRoughneck #Roughneck #Roughneckmag #energy #industry #NorthWestLNG #Petronas
