Now, I could cut loose about the fact Pacific Northern Gas makes $50 million - minus expenses including “management incentives” - on the sale of its interest in the Pacific Trail Pipeline and we, the long suffering customers that have propped up this company for years, apparently are not going to get a dime of it.
But I won’t - it’s bad for my blood pressure. Instead I will focus on an apparent positive that came out of all this.
In the course of his teleconference call last week to announce the sale, PNG CEO Roy Dyce took some time at the end to give his overview of the LNG industry.
Some of it was stating the obvious: not only was there an oversupply of natural gas in North America, there was an oversupply in the US itself, reducing its need for natural gas from Western Canada.
And therefore, with that oversupply having driven down prices, Canadian natural gas producers were shifting their focus to Asian markets which were already paying significantly higher prices for LNG they were importing from Australia and the Middle East.
When it came to that export drive, Dyce said Kitimat was quickly becoming the ideal location for export LNG plants. “There is the potential for more proposals. There is certainly room for more LNG terminals and there is room for more pipelines along the established pipeline corridor.”
Now admittedly that could be so much blarney. But I recalled something he had said earlier in his presentation, that there were only two LNG proposals (KLNG and LNG Partners) “in the public domain”.
Which inevitably had my suspicious mind wondering what’s out there that is not “in the public domain”.
Now combine that with a comment Apache Canada president Tim Wall made to CTV reporter Nathan Vanderklippe, that Apache/EOG would only be funneling their own gas through the PTP line.
Where does that leave other natural gas producers? Obviously, if they want to follow the Apache/EOG lead, they are going to have to build their own pipeline to their own LNG liquefaction plant.
Mind you, given there are no other proposals in the public domain, I cannot say with any certainty that they actually exist.
But then Apache/EOG just agreed to pay $50 million for a share in a pipeline that doesn’t exist either.
Malcolm Baxter