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Volume 62 No. 09
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Sentinel
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Northern
www.northernsentinel.com
Wednesday, March 2, 2016
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1.30 INCLUDES TAX
Promising AltaGas LNG project shelved By Rod Link For the Northern Sentinel What has been one of the more promising planned liquefied natural gas (LNG) projects in the northwest has been shelved. AltaGas of Calgary, the lead Canadian partner in the Douglas Channel LNG project planned for Kitimat, announced February 25 that it and its partners could not find anyone willing to buy the product. “Globally, there is reduced demand for LNG and with a surplus of LNG in the market and the consortium members were unable to secure offtake agreements,” AltaGas said in a corporate statement. Prices now for LNG are around onequarter of what they were just two years ago when LNG development fervour was at a peak in the region. Although at the small end of LNG projects at a projected 2.4 billion cubic metres of
natural gas per year to be exported, Douglas Channel LNG was regarded as one of the more feasible. It was not only less expensive, at a projected $500 million, in comparison to the larger planned projects worth more than $10 billion, it would not have required the construction of a natural gas pipeline because it would have been fed by the existing Pacific Northern Gas line. The project would have seen natural gas super-cooled and liquefied for export on an Asian-built floating platform moored near Kitimat and connected to facilities on land owned by the Haisla Nation and leased to the project. AltaGas had first formed a joint venture with Idemitsu, a leading Japanese energy company, and then added partners EDF Trading, an energy provider, and Exmar NV, an international shipper of petroleum
and other products, in developing Douglas Channel LNG. Its projected market had been Japanese
provided it with an existing natural gas pipeline. It then took part in buying a first con-
“Globally, there is reduced demand for LNG and with a surplus of LNG in the market and the consortium members were unable to secure offtake agreements” customers. The entry point for AltaGas into B.C.’s potential LNG industry began with its purchase of Pacific Northern Gas in late 2011 which
cept for a floating LNG platform near Kitimat out of bankruptcy nearly two years ago, using that as a base to revive the Douglas Channel LNG project.
Project economics aside, the project ran into a roadblock last fall when federal customs officials decided the imported LNH floating platform was a ship and tacked on an import duty which would have added $100 million to the project cost. AltaGas then appealed the decision and learned in early February it was successful. But that was not enough to salvage the project, said AltaGas in a statement. “While this decision is positive, and bodes well for de-
ployment of a similar floating liquefaction facilities in the future, the consortium had assumed a 0 percent duty when it began developing the project,” the statement indicated. The company did express satisfaction with what had been achieved, despite the decision to shelve the project. “The milestones achieved by the consortium, including the permits and duty relief, help prove out the feasibility of developing a floating liquefaction facility in British Co-
lumbia,” it said. “Individual consortium members can work with other stakeholders if they so choose to determine whether a similar project can be developed. AltaGas is very interested in working together or individually with Haisla and others to develop an LNG project.” To date, AltaGas has spent $24 million on the project. Skeena NDP MLA Robin Austin expressed disappointment at the news. Continued on page 3
AntiBullying Day at Kitamaat Community School /page 6 Gymnastics Club strikes gold at competition
Skills Canada BC Northwest Regional competion /page 15 PM477761
Hannah Langegger, pictured here, Mount Elizabeth Middle and Secondary School student earned a bronze medal in carpentry at the Skills Canada BC Northwest Regional competition for trades students in the Northwest, which was hosted by Northwest Community College. Justin Hickman, also a MEMSS’s student, received a bronze medal in the Welding category. See story on page 3.