BC now lists a dozen LNG projects in the planning stage. Not to mention two Oregon projects being planned that would also use BC gas.
The BC Government created a ministry of Natural Gas Development. As part of this plan, the B.C. government set a goal of having three LNG facilities in operation by 2020. Most of these projects are planned for northwest British Columbia in communities such as Kitimat and Prince Rupert. These projects are so significant that they represent the largest private sector investment proposals in the Province’s history.
The IEA estimates that by 2020 China will need 300 bcm (billion cu.meters) to meet its demand for natural gas; Japan and Korea will need about 170 bcm. By contrast, the world’s largest LNG exporter, Australia, will provide in total 45 bcm to these markets. The stated capacity of the BC planned projects is 100 bcm.
Growing competition for oil and gas customers worldwide will cut into export profits and government revenues. The Government of BC has been consulting with the industryand is expected to release its LNG tax regime in the province’s budget on Feb. 18. The National Energy Board has already granted export licences for Kitimat LNG and six other B.C. LNG plans, but none of the approved projects are in the terminal construction stage. LNG proponents say they first need to learn details of the B.C. government’s plans for taxation of the fledgling LNG industry and internal assessments still must be conducted on the economics of proceeding.
BC has a tremendous amount of natural gas - enough just in the Montney Shale play to provide for all of Canada’s needs for 180 years. The BC Government’s announcement later this month will be important. All the proponents will need to prove a business case to justify the massive investment.
The BC LNG plans are ambitious, but there is likely not the capacity, money or manpower to get more than two or three projects into operation in the next 7 years.