On December 7th, 2015 much of the Chinese capital shut down after Beijing’s city government issued its first red alert for pollution. Less than 2 weeks later, China issued a second red alert December 18th, 2015.
China, which meets 66% of its energy through coal, has committed to reducing that to 62% by 2020. Despite that commitment, it continues to build new coal-fired power plants at an alarming rate. Coal is the dirtiest of all fossil fuels, it creates more pollution than oil, natural gas and gasoline when burned.
Liquid natural gas (LNG) is the cleanest fossil fuel, and Canada has an abundance of natural gas. “That’s another significant piece that people miss on this whole LNG story in B.C – that we’re actually helping large economies that are continuing to grow to create new transition fuels to get out of older fuels into cleaner-burning fuels,” said Greg D’Avignon, CEO of the Business Council of BC.
Northeastern BC is home to the Montney Formation and Horn River Basin, the third largest hydrocarbon fields in North America. Between the drilling, piping, and exporting of the natural gas in British Columbia, there is over $100 billion of proposed capital investment. Each project has one key component: all of the natural gas comes from Northeast BC.
A few of these massive capital projects proposed are as follows:
- LNG Canada led by Royal Dutch Shell – $40,000,000,000
- Pacific NorthWest LNG led by Petronas – $36,000,000,000
- West Coast Canada LNG led by Exxon Mobil – $25,000,000,000
Given the speculation regarding the future of BC LNG, we wanted to share some recent facts.
$715 Million Natural Gas Processing Plant Project Is Greenlit
Construction of the processing plant, which would be south of Fort St. John, has received the go-ahead from the Cutbank Ridge partnership formed by Encana and Mitsubishi. The complex includes a processing plant as well as storage and other facilities. The decision to build the complex follows the announcement of a $860 million natural gas plant near Dawson Creek, by Cutbank Ridge.
Both processing plants are expected to start operating in 2017, and would handle natural gas from the Montney Formation.
Site preparations underway at LNG Canada site in Kitimat
It’s not a final investment decision but LNG Canada is embarking on early site preparation at their proposed liquefaction plant site which will pave the way towards a smoother construction phase.
There are currently 120 people working on site.
If a positive FID is made in 2016 the company would then shift to construction of permanent facilities on the property.
Another item leading up to their FID, is the decision to lease a parking lot at Northwest Regional Airport in Terrace.
“LNG Canada has made provisions for parking at the Northwest Regional Airport in Terrace to function as a “park-and-ride” facility for LNG Canada staff and contractors who live in Terrace and the surrounding areas,”.
Petronas LNG terminal ‘not likely’ to harm Flora Bank
Pacific NorthWest LNG, led by Malaysia’s state-owned Petronas, wants to build an $11.4 billion export terminal on Lelu Island, which is located next to Flora Bank.
“The technical work completed to date indicates that the project is not likely to cause significant adverse environmental effects on fish and fish habitat,” according to the consortium’s 36-page summary of its findings.
Recent news about an global glut of LNG under production has cast a shadow over BC’s prospects to develop the industry, but as late as mid November Petronas CEO Datuk Wan Zulkiflee Wan Airffin said, “the company will proceed, pending federal approval.”
Between the $8.9 billion BC Hydro Site C Dam, and the over $100 billion of proposed capital for BC LNG, the population in Northeastern BC is expected to double by 2020.
These massive capital projects create high paying jobs, and people move to the region to fill these jobs. The average age in Fort St. John is 29 years old with an average income of $108,000.