LNG Canada announcement latest setback for Northwest LNG plans

The proposed LNG Canada
development for Kitimat has been
postponed indefinitely

On Monday, the proposed LNG Canada Terminal project went from pause, to indefinite suspension, adding the plans for an LNG terminal in Kitimat to the growing list of projects that are now on the back burner, with no timeline in place for its development.

Monday's announcement noted that while site preparation activities would continue, the Joint venture partners of Shell, Petro China, Mitsubishi Corporation and Kogas would require more time to devise a revised path forward towards any Final Investment Decision, if indeed they ever decide to move forward with the project.

The LNG decision marks another setback for the plans of the British Columbia Liberals who have been laying the groundwork to develop an industry from the ground up in the province, though global influences it would seem are coming together to make the ambitious plans for development somewhat hard to reach in the short term.

The indefinite postponement for LNG Canada should be of particular concern for Premier Christy Clark and her hopes of for LNG in BC, as the Kitimat proposal had already achieved the key regulatory approvals required to move the project from concept to reality.

For municipal politicians and community members hoping to see the launch of the LNG industry both in Kitimat and Prince Rupert, a worrisome passage from Monday's announcement puts the focus on external factors and the impact they have on decision making.

"However, in the context of global industry challenges, including capital constraints, the LNG Canada Joint Venture participants have determined they need more time prior to taking a final investment decision. At this time, we cannot confirm when this decision will be made."

Those words offer up an indication of future trends and potential talking points for remaining projects. Something that could see the much anticipated economic development for the area deferred far into future years, if the industry even takes off at all.

The LNG Canada project joins the Douglas Channel LNG proposal for Kitimat, suspended earlier this year, as well as the BG Canada proposal for Prince Rupert  which was put far back on a the burner in 2014.

They mark the earliest of those energy projects proposed for the the Northwest in recent years, industrial plans that for now it appears, will join the ranks of other large industrial projects that never quite made it to the finish line.

Of the four active proposals under consideration for the Prince Rupert region, the Pacific NorthWest LNG project is the one closest to some form of decision.

The CEAA process for that proposed terminal at Lelu Island is expected to come to an end in September and a highly anticipated announcement regarding any potential approval from the Federal government expected by the end of that month.

However recent reports related to the Petronas led project have suggested that the Malaysian energy company may also be planning to defer any Final Investment Decision until sometime in the future.

The remaining North Coast LNG proposals for Digby Island, Tuck Inlet and Grassy Point are all in various stages of very early exploration and review.

Some notes on the latest shift in the LNG dynamic can be found below:

Shell's LNG Canada venture again delays export terminal decision
Shell-backed LNG Canada delays plans for terminal on B.C. coast
Shell delays FID on LNG Canada project
LNG Canada delays US$40B Kitimat project
'Global industry challenges' delay LNG Canada Project
LNG Canada's joint venture participants delay final investment decision
LNG Canada latest to delay investment
Shell-Led Group Delays Decision on Canada Gas Export Plan
Final investment decision for LNG Canada
LNG Canada Delay (video)


A look at the full range of proposals for the Northwest can be found on our archive page.

Cross posted from the North Coast Review