As LNG struggles in Australia, where does that leave B.C.’s industry?
Posted October 27, 2015 2:51 pm.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – Pick up a newspaper from our Commonwealth cousins in Australia and the headlines are far from hopeful when it comes to LNG.
Layoffs of workers, companies posting losses.
But what does this mean for our province’s nascent industry?
Earlier this year, BG Group wrote down the value of its Australian assets by $9-billion (U.S.) due to sinking oil prices, and Royal Dutch Shell scrapped a $20-billion (U.S.) project.
Economist Werner Antweiler with the Sauder School of Business says this climate of depressed energy prices means LNG projects could be slower to launch here, especially ones with no secured long-term contracts.
“Ones that have lined up a long-term partner, there is a very strong potential that these projects will go ahead,” says Antweiler. “It’s the projects that haven’t a guaranteed market that are still looking for a dedicated market where the potential is much more questionable. These projects will probably be pushed back. They won’t be abandoned, but they will be delayed.”
That said, Antweiler feels there will eventually be demand given many Asian countries want to move away from dirtier fuels.
“It’s a volatile market,” Antweiler says. “The long-term prospects are also related to how British Columbia is developing its gas fields. There are more questions looming about our carbon emissions and what the province is going to do to manage the long-term prospects for managing its carbon portfolio.”
LNG figured prominently in Premier Christy Clark‘s successful re-election campaign in 2013, with promises of $100-billion in revenue for the province in what she called a “prosperity fund.”
While companies remain interested in setting up LNG projects in this province, no final investment decisions have been made for any major project.
