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 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.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Terrace River Kings lost 3-9 to the Quesnel Kangaroos on Mar. 2, 2019 in the final CIHL playoffs. (Lindsay Chung Photo)
Central Interior Hockey League cancels 2020/21 season

League open to playing exhibition games if possible

The team at Burns Lake Elizabeth Fry Society, who work to support those affected by domestic abuse and violence. (Submitted/Lakes District News)
Rio Tinto donates $25,000 to each Kitimat’s Tamitik Status of Women, Burns Lake Elizabeth Fry Society

Part of larger support to those helping women and children experiencing family and domestic violence

An aerial shot of Cedar Valley Lodge this past August, LNG Canada’s newest accommodation for workers. This is where several employees are isolating after a COVID-19 outbreak was declared last Thursday (Nov. 19). (Photo courtesy of LNG Canada)
41 positive COVID-19 cases associated with the LNG Canada site outbreak

Thirty-four of the 41 cases remain active, according to Northern Health

Kitimat RCMP were requesting assistance locating 24-year-old Teah Wilken, who was last seen getting on a bus at City Centre Mall in Kitimat around 6:30 p.m. Monday (Nov. 23). Kitimat RCMP Facebook photo.
UPDATE: missing woman found safe at residence

Wilken last seen getting on bus at City Centre Mall in Kitimat around 6:30 p.m. Monday (Nov. 23)

Black Press file photo
Moose hit on Hwy 37 S

The collision happened Saturday (Nov. 21) and three people were taken to hospital

A man wearing a face mask to help curb the spread of COVID-19 walks in downtown Vancouver, B.C., Sunday, Nov. 22, 2020. The use of masks is mandatory in indoor public and retail spaces in the province. THE CANADIAN PRESS/Darryl Dyck
B.C. records deadliest day of pandemic with 13 deaths, 738 new COVID-19 cases

Number of people in hospital is nearing 300, while total cases near 30,000

(File photo)
Alberta woman charged after allegedly hitting boy with watermelon at Okanagan campsite

Police say a disagreement among friends at an Adams Lake campsite turned ugly

Court of Appeal for British Columbia in Vancouver. (File photo: Tom Zytaruk)
B.C. woman loses appeal to have second child by using late husband’s sperm

Assisted Human Reproduction Act prohibits the removal of human reproductive material from a donor without consent

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Krista Macinnis displays the homework assignment that her Grade 6 daughter received on Tuesday. (Submitted photo)
B.C. mom angry that students asked to list positive stories about residential schools

Daughter’s Grade 6 class asked to write down 5 positive stories or facts

B.C. projects targeting the restoration of sockeye salmon stocks in the Fraser and Columbia Watersheds will share in $10.9 million of federal funding to protect species at risk. (Kenny Regan photo)
13 projects protecting B.C. aquatic species at risk receive $11 million in federal funding

Salmon and marine mammals expected to benefit from ecosystem-based approach

Barrels pictured outside Oliver winery, Quinta Ferreira, in May. (Phil McLachlan - Black Press Media)
B.C. Master of Wine reflects on industry’s teetering economic state

Pandemic, for some wine makers, has been a blessing in disguise. For others, not so much.

An employee of the Adventure Hotel was taken to hospital on Nov. 20 after she confronted a customer of Empire Coffee about not wearing a mask. File photo.
Nelson hotel employee suffers heart attack after being assaulted in anti-mask incident

An accountant at the Adventure Hotel is in hospital in Kelowna

Most Read