LNG glut dims outlook for new plants

Coleman confident B.C. will be competitive despite low prices, challenges flagged in natural gas forecast

A new forecast of global natural gas demand paints a gloomier picture of the prospects for the launch of a major new LNG industry in B.C.

A new report suggests the odds are getting longer for the B.C. government’s dream of opening several liquefied natural gas export plants.

The International Energy Agency warned a flood of new LNG supply is coming onto the market and new plants will struggle to get off the ground.

“Several projects have already been scrapped or postponed, and the number of casualties will rise if prices do not recover,” said the IEA’s medium-term gas market report.

The IEA cut its LNG growth forecast from 2.3 to 2.0 per cent a year.

It noted the 17 new LNG projects already under construction will come on stream as planned and run flat out in an attempt to recover as much of their sunk costs as possible, further adding to the supply glut.

But new plants that aren’t yet approved will become harder to justify.

“Today LNG prices simply do not cover the capital costs of new plants.”

Natural Gas Development Minister Rich Coleman said he’s aware of the short-term challenges outlined in the report.

The province last month signed a long-term agreement with LNG proponent Pacific Northwest LNG assuring the $36-billion Petronas-led project of royalty and tax stability in B.C.

“Clearly some of the largest companies in the world see the value in building a LNG industry in B.C.,” Coleman said in a statement emailed by his office.

“The fact is, LNG projects have lifespans of 30-50 years. So proponents are looking at the long-term economics when deciding the viability of a project . Many analysts are forecasting that B.C. LNG will be competitive over the long-term. We share that view.”

Just Posted

QUIZ: Test your knowledge of Victoria Day

How much do you know about the monarch whose day we celebrate each May?

Tofino athletes Devries, Olin selected for Surf Canada Olympic pathway team

“We’ve got a lot of work to do before any of us qualify for the Olympics.”

Port Alberni’s RE/MAX Ride the Rim cyclists pedal into Ucluelet

“I did it for the children and for the love of the sport.”

Surfrider cheers ocean friendly businesses in Tofino and Ucluelet

Surfrider Pacific Rim is pushing for an ocean friendly, plastic-free, peninsula.

UPDATE: B.C. pilot killed in Honduras plane crash

The crash happened in the Roatan Islands area, according to officials

Raptors beat Bucks 118-112 in 2OT thriller

Leonard has 36 points as Toronto cuts Milwaukee’s series lead to 2-1

‘Teams that win are tight’: B.C. Lions search for chemistry at training camp

The Lions added more than 50 new faces over the off-season, from coaching staff to key players

Rescue crews suspend search for Okanagan kayaker missing for three days

71-year-old Zygmunt Janiewicz was reported missing Friday

B.C. VIEWS: Reality of our plastic recycling routine exposed

Turns out dear old China wasn’t doing such a great job

Carbon dioxide at highest levels for over 2.5 million years, expert warns of 100 years of disruption

CO2 levels rising rapidly, now higher than at any point in humanity’s history

RCMP arrest violent offender on Vancouver Island

Police struggle with suspect and take him down with a taser

B.C. ferry stops to let black bear swim past near Nanaimo

Queen of Oak Bay brakes for wildlife in Nanaimo’s Departure Bay

Mother dead, child in critical condition after carbon monoxide poisoning at Shuswap campground

The woman was found unresponsive insider her tent and the youth was taken via air ambulance to hospital

Most Read