This boom will end soon when it become obvious that LNG was and is only C. Clark dream-pipe/election ploy.
After Japan Nuclear Reactor Disaster price for NG in Asia went throughout the roof.
Since then, they are down significantly to the point that by mid-Summer of 2014 it did not make any financial sense to build any LNG plants and pipelines in BC form scratch, even with
zero tax.
Australia is even postponing few of its 7 huge plants due to lack of demad and low prices. They are near completion and cost of shipment is much lower then form BC. US will have few within 12-18 months and infrastructure is already ready in Luisiana. Qatar and some african nations are ready too. Russia got big deal with China and more to come are they need hard currency and income.
Also Japan is restarting 2 of its idled nuclear reactor what will drive pries even further. Note that some of these articles ( the second one has nice analysis) were written few months ago before oil and NG went down even further.
Another Problem is that Petronas capitol spending has shrank significantly due to low oil prices and fulfill Patronas original goal of future LNG capacity BC account for only very small fraction of that goal.
Why build in BC from scratch if other places like Australia, Qatar or US are ready to deliver NG at much lower cost. For forceable future there will be huge glut of NG/LNG on world markets.
Why Apache terminates its partnership with Chevron for Kitimat plant, why Petronas is dragging its feet ?
The answer is simple, to not blow C. Clark dream-pipe immediately, so she still can enjoy her election ploy and dream about reaches of NG in BC.......:Eyecrazy::chuckle:
One thing First Nation is watching is if under guise of LNG pipeline to Kitimat, they do not put pipe which is also suitable for oil. As we know Saudi-Alberta organized crime syndicate with his boss S. Harper will do anything to please his corporate puppet masters.......
http://www.reuters.com/article/2014/12/11/asia-lng-idUSL3N0TV2JZ20141211
http://www.edmontonjournal.com/Lamphier+prospects+still+doubt+despite/10315915/story.html#__federated=1
“The biggest risks to the projects still come from the obvious sources: initial construction costs and the eventual selling price of the LNG. With LNG price risks skewed to the downside, however, the economics of such projects still look questionable.”
What’s more, few producers have been able to complete new multibillion-dollar LNG plants on schedule and on budget, FirstEnergy notes. Over the past decade, almost every new LNG plant in the world has exceeded cost estimates by between 10 per cent and 40 per cent.
Even so, LNG pricing remains an even bigger threat to the viability of B.C.’s projects, FirstEnergy adds.
“If you use our current crude oil price forecast of around $100 US per barrel for Brent, then the approximate oil-linked price (for LNG) into Japan is around $15 per MMBtu (million British thermal units). Drop the Brent price to $90 per barrel for the next several years and the Japan-landed price for oil-linked LNG falls to about $13. This is barely enough to cover the riskier higher-cost case for a B.C. LNG terminal.”
