Petronas to invest up to $16B for B.C. LNG infrastructure
Dirk Meissner, The Canadian Press
Published Tuesday, June 11, 2013 11:21AM PDT
Last Updated Tuesday, June 11, 2013 8:02PM PDT
VICTORIA -- Global energy corporations are "dead serious" about investing in British Columbia's potential as a world supplier of liquefied natural gas, said provincial Natural Gas Development Minister Rich Coleman after a $16 billion announcement on Tuesday.
Malaysian national oil company Petronas said the investment would go towards a natural pipeline, LNG plants and an export terminal near Prince Rupert, on B.C.'s northern coast.
"Petronas has been very interested in LNG for B.C. for some time," said Coleman, who was just appointed B.C.'s minister responsible for natural gas in Premier Christy Clark's new cabinet last week. "What they've said is $11 billion for the plants, $5 billion for the pipeline. Basically, it's an announcement that says we're closer and moving along faster than you might have thought we were."
Arif Mahmood, Petronas' vice-president of corporate planning, said between $9 billion and $11 billion will be spent to construct two LNG plants.
A 750 kilometre-long pipeline, to be built by TransCanada Corp., would supply gas to the plants, he said Tuesday in an email to The Associated Press.
The Pacific Northwest LNG project would liquefy and export natural gas produced in northeastern B.C. by Progress Energy Canada.
LNG is produced when the gas is super-cooled to produce a liquid, making it easier to export to overseas customers.
Petronas bought Calgary-based Progress last year in a $6-billion friendly deal. The two companies had been previously working together on the same projects.
In January, Calgary-based TransCanada said it would design, build, own and operate the proposed Prince Rupert Gas Transmission project for Progress Energy.
Coleman said the proposed Petronas project will undergo a provincial environmental assessment process that will take at least a year to complete.
He said it appears the Petronas project will be powered by natural gas, permitted under B.C.'s Clean Energy Act.
Environmental organizations say using natural gas to power LNG plants increases harmful greenhouse gas emissions and virtually ensures B.C. will not meet its legislated target of cutting GHG emissions by one-third by 2020.
Coleman said the Petronas project is one of four major LNG proposals worth billions that are under consideration in northwest B.C.
"The four are at different stages, but some of them are at significant decision points over the next few months," said Coleman.
Shell and Chevron are seriously considering LNG facilities for Kitimat, while British Gas and Petronas are looking at the Prince Rupert area.
"Shell's been here for a while, so has Chevron with Apache and so has British Gas," Coleman said. "I don't think it's a pipe dream. I actually believe this is very real. My conversations with the companies, both in The Hague with Shell, British Gas in England, and these other groups, their senior people, they're dead serious about B.C. natural gas."
Clark's jobs plan has forecast one pipeline and LNG terminal in operation by 2015 and three others up and running by 2020.
The provincial government says LNG represents a potential trillion-dollar economic opportunity that could create thousands of jobs and result in revenue that could eliminate the provincial debt within 15 years.
B.C.'s debt is currently at more than $62 billion and forecast to increase.