Another bad omen for the Alaska gasline to the lower 48: if the economics favor exporting LNG from BC to Asia, why would anyone spend $40 billion to pipe Alaska gas to BC? ...
Kitimat LNG To Export Instead Of Import
resourceinvestor.com
By Lauren Krugel
22 Sep 2008 at 12:01 PM GMT-04:00
Kitimat LNG is reversing a plan to import liquefied natural gas through a new site it wants to build on B.C.'s coast, saying it now makes more sense to export the fuel from Canada to lucrative Asian markets.
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CALGARY (CP) -- The private Calgary-based company says the new plan will require more people to build and operate the terminal, which would begin operating in the 2013-2014 timeframe.
Kitimat LNG said Friday that "fundamental changes" in the global natural gas market have made it more viable to export liquefied natural gas than to import it at the planned Bish Cove terminal near Kitimat, B.C."
The growing economies of the Pacific Rim and rapidly increasing demand for LNG make Asia a natural market for B.C.'s plentiful and expanding supplies of natural gas," said Rosemary Boulton, president of Kitimat LNG.
The company has already received regulatory approvals for the facility in its earlier form, and the new framework will probably still meet those criteria, Boulton said in an interview.
"All of the work that we've done still fits into the footprint of the site that was previously approved," Boulton said.
"The science behind the technology and all the work that we've done to date really indicates that it's very little change from an environmental perspective."
Construction is set to begin in late 2009 or early 2010, with the LNG facility coming into operation 36 to 40 months later.
The 40-hectare site will have two storage tanks, a marine jetty and a berthing facility.
Under the new proposal, 1,500 construction jobs will be created versus 700 in its earlier incarnation. There will be 100 permanent jobs created — double from the previous proposal.
"Despite the fact that we've got the facility to fit into the same footprint we were previously approved for, there is a difference in technology and it will require more people to build it during the construction phase," Boulton said, adding that the operational elements will also be more complicated.
Steve Wilson, chief councillor of the Haisla First Nation, said he supports the project.
"Our community has much to offer the proposed terminal, and we look forward to the employment and skills training a new LNG terminal would provide," he stated.
Many big energy names are developing massive unconventional gas plays in northeastern B.C.'s Horn River Basin and Montney formations, though Boulton said Kitimat LNG made its decision based on the bigger supply picture.
"We certainly pay attention to those, but we do see that the supplies in the Western Canadian basin are increasing overall," she said.
She said there is already an extensive pipeline network that connects B.C. gas suppliers to the Kitimat area.
Ilene Schmaltz, Kitimat LNG's vice-president of supply and marketing, said delays and cancellations of several LNG liquefaction terminals have caused major LNG shortfalls globally.
"Regasification terminals in North America are underutilized," Schmaltz said.
Earlier this year, Petro-Canada (PCA) and TransCanada Corp. (TRP) put a proposed regasification terminal in Gros Cacouna, Que. on hold after Russia's Gazprom, from which the companies had hoped to get their supply, cancelled a plant in the Baltic Sea.
Natural gas prices in North America have been falling in recent months — from above $13 per thousand cubic feet to around $7.50 on Friday.
Kitimat LNG has entered into a memorandum of understanding with a "leading multinational corporation," but Boulton declined to identify the potential partner, since it its in the process of studying the feasibility of joining the project.
The partner could be involved in operating the facility or just take a more commercial role, Boulton said.
LNG is natural gas that has been cooled to about -160 degrees C, condensing it into liquid form that is easier to transport by sea.
© Canadian Press |
