“The script that we thought it would go by might turn out to be different but that’s ok because we are still seeing progress and I am really pleased about that,” Premier Clark told 250 News.
That noted, a new report released by investment firm Sanford C. Bernstein & Co. is predicting only two LNG projects slated for B.C. will move forward as the industry suffers an “anxiety attack” stemming from the sharp drop in commodity prices, according to the Financial Post.
The Post cites Bernstein’s report as predicting Shell Canada’s $40 million LNG project will be operating by 2021 if a final investment decision is reached by 2016. Bernstein is also forecasting Kitimat LNG, supported by Chevron and Woodside Petroleum, will likely see first shipment by 2023.
While Pacific NorthWest LNG was not included as a forecasted success, a project that was deferred in December 2014 amid concerns of declining oil prices and challenging costs, many industry observers predict a positive final investment decision before the first quarter end, according to the Post.
In fact, the Post says most of the global LNG industry has recently increased their focus on cost-cutting as Asian LNG prices have fallen below US $10.00 per BTU – a 50 per cent decrease from this point last year.
This is also said to be a direct result of a decreased price in oil, weak LNG demand and an abundant of supply, according to Citibank.
Another hurdle facing B.C.’s LNG industry is the eight new LNG project in Australia – furthering the global capacity over the next two years by 60 mtpa.
The Post is also reporting that Energy and Mines Minister Rich Coleman says he’s not fazed by the banks predictions, citing his own prediction of the province meeting its target of three projects by 2020.
Some elements that may be playing a role in Minister Coleman’s optimism include the possibility that stubbornly lower commodity prices may actually stimulate global demand, according to the Post.
Other positive outcomes may result from energy importers’ desire to secure cleaner fuels, as well as working with jurisdictions that are not prone to problematic behaviour, such as Russia and the Middle East.