Tuesday, July 25, 2017

Petronas is Out, Pacific NorthWest LNG In Prince Rupert Is Dead, Done, Kaput..PERIOD

Written by Grant G

Good morning British Columbia, and the top of the morning to all, including the pathetic Christy Clark led BC Liberal Government..

Time for another Straight Goods LNG special report...

I have covered the LNG scam for the last 3-4 years, every angle, nuance and development from far and wide..

3 years ago there was LNG hype, brought on in part by the Fukushima nuclear disaster...LNG exporters jumped all over Japan and gouged the heck out of them..they nearly brought Japan to their knees, every big energy company swooped in and hovered like vultures...

Japan under pressure shut down their nuclear power...That time in history has now passed, Shinzo Abe was elected 2 years ago on a pro-nuclear stance "Abe-Economics"...Japan has restarted three reactors and 10 more are scheduled to restart this year...In other words, the Japan gravy train has left the station, leaving big LNG energy companies high n dry..

Meanwhile during the last 5 years gobs of new LNG supply have hit the market...more supply than customers..Longterm LNG contracts are being inked for $5 dollars per MMBTU`s..

That is less than half the money required by Petronas, Shell Canada and Altagas to break even...

Altagas, they had their import duties waved on their 100% foreign built floating liquefaction facility, they had an existing pipeline in Kitimat to hook up to, they had First Nation support from the Haisla...With all that Altagas couldn't secure any customers at a price anywhere near breaking even...

The cheapest of the cheap in terms of LNG production couldn't make an economic go of it...If Altagas couldn't survive as a bit player neither can Petronas..

LNG is different than oil,...oil can be stored relatively cheap, tanks can be built ...as for LNG..

Storing LNG is very expensive and very limited, storing LNG and waiting for a time and place when prices rise is not an option, gas, LNG is under enormous pressure, it's very expensive to store, very limited, in other words any LNG produced must be sold...So, without customers, without committed longterm buyers at a high price new projects die on the vine..

With the LNG glut and China slowdown combined with Japan restarting their nuclear plants along with worldwide pressure to go green, with renewable power, solar and wind power generation dropping in price the golden age of LNG is over..(before it even started)

British Columbia missed the boat...By the grace of God British Columbia missed the LNG disasterous Titanic boat..

Years ago...LNG world news....and the LNG Journal was filled with story after story of new developments, new mergers, acquisitions...Today LNG World News and the LNG Journal is barren of news...Most stories emanating from those LNG news sources are of refinancing, lowered expectations, bankruptcies, delays, deferrals...Here are the latest examples(last night) from LNG World news...


Exmar of Belgium said it has terminated the agreement with Pacific Exploration and Production executed in March 2012 for the deployment of the Caribbean FLNG in Colombia.


Japan’s price of spot liquefied natural gas contracted in February averaged US$6.5 per mmBtu on DES basis.

The price dropped 8.5 percent compared to $7.1 per mmBtu January, when it has already reached the lowest point since Japan’s Ministry of Economy, Trade and Industry (METI) started publishing monthly reports in March 2014.
Compared to the same month in 2015, the contract-based price dropped 13.3 percent from $7.5 per mmBtu.
According to METI’s latest report, the average price of spot-LNG imported into Japan that arrived in February stood at $6.9 per mmBtu. This was a drop of 12.7 percent compared to the $7.9 per mmBtu in January 2016.
In comparison to February 2015 when it stood at $10.7 per mmBtu, the arrival-based price dropped 35.5 percent.
Only spot LNG cargoes are taken into account in this assessments, excluding short, medium and long-term contract cargoes, as well as those linked to a particular price index.


The Sodeshi LNG terminal, operated by Shizuoka Gas, is close to starting liquefied natural gas reloading operations, company’s deputy general manager, feedstock department, Hirotaka Kaneda said. 

Kaneda told Bloomberg that the reloading facility at the Sodeshi terminal is set to be completed in April, becoming the first Japanese facility to resell cargoes on a regular basis. He added that currently only Kansai Electric Power has an LNG reloading facility in Japan.
The facility has been completed in 2007 and only used to reload one cargo, the report said.
Shizuoka Gas imports about 1 million tons of LNG per year and plans to resell up to two cargoes per year to neighboring countries like China and South Korea, according to Kaneda.
He noted that smaller companies like Shizuoka Gas could cut average prices by reloading and reselling cargoes.
Japan is expected to have a 12.2 billion cubic meters of LNG surplus in 2017 with declining imports and other utilities are also interested in using Shizuoka Gas’ reloading facility to resell surplus gas.
Kaneda declined to reveal the names of interested companies, although he did add that the reloading facility would allow them to buy cheap spot cargoes and ship them elsewhere once the prices of LNG recover, the report said.


Texas-based LNG player Excelerate Energy said it reduced the size of its commercial trading and chartering team as part of a reorganization.

The reorganization, made due to the near full commitment of Excelerate’s fleet to long-term projects, resulted in the elimination of six positions, a spokeswoman at the company told LNG World News in an e-mailed statement late Monday.
However, despite reducing the size of its trading and chartering team, Excelerate will continue to be active in those areas, the spokeswoman said.



I could go on and on citing articles and reports ....But there is no point...Petronas has been playing politics with Canada and in particular with British Columbia...Michael Culbert, the head man for Petronas PNW LNG is being punted up to Progress energy, he is no longer leading Petronas's PNW LNG....Another Petronas talking whore was a man named Spencer Sproule, he was Petronas's BC spokesperson..He was also employed a few years back by Christy Clark and the BC Liberals...

These talking heads are gone, kaput.....

Where was I....ah yes, LNG produced must be sold...There is a world glut now, as in today with gobs of new supply coming online from Australia, USA and Iran, and Russia...Those companies have cut deals already to sell cheap LNG for decades to come, cut cheap LNG deals to secure market share...

"One in the hand is worth two in the bush"

LNG can't be stored and British Columbia is not a banana republic(well, BC Liberal Government are corporate fascists)...British Columbia loves it's nature, it's salmon, ..British Columbia will fight to save the Skeena River and Justin Trudeau will not approve the project...Petronas can find another location, there are 20 other dead LNG proposals in British Columbia and Petronas can buy one of those locations if it wishes to..

However...Petronas is not going to build anything, Petronas will fling mud at Trudeau and play footsy with Christy Clark a while longer...The British Columbia LNG fantasy is dead..

Oh...One more thing...Big energy companies that lose money pay no taxes, any royalty payments would be deducted against taxes owed and we the people of Canada would not only pay the price tag for foreign built LNG facilities we would also end up paying Petronas to take our gas..

The Skeena river will be saved...Rich Coleman and Christy Clark will continue to advertise LNG riches just over the horizon...That LNG bonanza will never come, that sunrise will never be seen..

Read the below information....My condolences to the people of northern British Columbia...Don't be mad at me, be mad at Christy Clark and the BC Liberals for making such outlandish claims..

Debt free..$100 billion dollar prosperity fund...Eliminate the sales tax...100,000's of LNG jobs..

Christy Clark is a nasty political whore, she's rude, she's stupid, she can't speak English she speaks word salad...


But in an interview from Kuala Lumpur, where Petronas is based, Michael Culbert, the project’s president, denied proponents have given Ottawa a March 31 ultimatum for a decision on where it can be built.....

“We are continuing to move that forward and we believe we are in the final stages to a final decision,” said Culbert, who is stepping down April 1 from the LNG leaderhip role to concentrate on the upstream end of the project.

The shareholders of the $36 billion proposed project will decide whether to go ahead after reviewing its economics and the conditions of its permit. The project is owned by Petronas, China’s Sinopec, Japan Petroleum Exploration Co., India Oil Corp. and Petroleum Brunei.....

Culbert also denied the project is laying off staff, even though a terminated employee said Tuesday some are being advised they will be out of a job....

Meanwhile, more than 130 Canadian and international scientists are urging the federal government to reject an environmental review of the project, claiming it is “scientifically flawed.”


Reported elsewhere....More words that strongly suggest Petronas is walking away...


The national oil corporation also said it would review the final report with project shareholders and evaluate conditions attached to the report to further determine their impact on overall cost structure and project schedule.

"The outcome, reviewed together with the LNG market outlook and overall project commerciality, would be used to develop the proposal for an investment decision to be considered by PNW LNG shareholders," the statement added. - Bernama


Scientists want federal environment minister to reject 'flawed' B.C. LNG report

That's because opposition from First Nations, environmental groups and some area residents has focused on a concern the project will harm eelgrass beds on Flora Bank. The bank, adjacent to Lelu Island where the terminal will be built near Prince Rupert, is considered prime fish-rearing habitat, including in a federal study dating back to 1973.
The scientists said, in the letter addressed to Environment Minister Catherine McKenna and copied to Trudeau, that scientific flaws in the draft report include: not accurately characterizing the importance of Flora Bank for fish; conclusions on the lack of harm to species such as oolichan without evidence; and a disregard for studies that were not funded by the company.

"Five decades of science has repeatedly documented that this habitat is not representative of other areas along the north coast or in the greater Skeena River estuary, but rather this is exceptional nursery habitat for salmon that support commercial, recreational and First Nation fisheries from throughout the Skeena River watershed and beyond," says the letter signed by the scientists, including Moore.
The scientists who signed the letter - largely fisheries biologists and ecologists - come from across Canada and the U.S. states of Alaska, Washington, Oregon, California, Montana and North Carolina.
Several former federal and provincial scientists also signed the letter, including Otto Langer, former head of habitat for the Department of Fisheries and Oceans, as well as scientists affiliated with environmental groups. The scientists also said there had been inadequate consideration of cumulative effects, such as destruction of shoreline habitat, acid rain and accidental spills.
Also of concern is that a plan by the company to offset habitat loss by improving habitat in other areas has not been proved to be helpful and could do more damage, said the scientists.
Public comments on the draft report close March 11, after which CEAA will produce a final report.

Read more: http://www.vancouversun.com/business/resources/scientists+want+federal+environment+minister+reject/11773076/story.html#ixzz42QpdiJYq



British Columbia will a need plan B to pay off the massive debt accrued by the BC Liberal Government...Time to stop Site C dam...The power will not be needed and ratepayers have been hurt enough..

Time to start making real loud noises John Horgan...Time to get off the LNG fence

The Straight Goods

Cheers Eyes Wide Open


John's aghast said...

Why not reconfigure the LNG process back to NG, ie. leave it in its natural state? Instead of planning to GIFT it to PETRONAS or some other international graftee, why not GIFT it locally - to the transportation industry, to locomotives, the Ferry system?
Why not, instead of supporting the horrendously expensive liquefying/transporting process, put those funds towards utilizing the resource locally?
Okay, all rhetorical questions. Why not urge West Kelowna to secede from British Columbia and take Chrispy/Coleman with them.
Why not see if the rest of BC (RoBC) can succeed WITHOUT their damning leadership?
Wouldn't it be wonderful if RoBC could function without Site C and LNG to concentrate on Poverty Reduction, Education Reform and retention of good old economic stability, without the looming financial disaster.
Okay, I'm breathing normally now.

Anonymous said...

not making money on the lng but on the taxbreaks/credits?

Anonymous said...


leona said...

I love reading your take on the gov and its foolish plans on lng. thank you

Grant G said...

Thanks Leona....Recently there have been some rightwing twitter attackers bashing me, claiming I have been celebrating and cheering LNG's B.C. failure..

I tweeted those people(?)back..."Don't shoot the messenger"...Reporting on the economics, the phony job numbers and GHG implications is not cheerleading...

There was a petition from the peace river area urging Trudeau to approve Petronas..

unemployed gas workers are hardly a reason to approve a LNG that's located in a bad spot, in front of Canada's second most productive salmon rivers..

Altagas and Shell Canada LNG had all the approvals required, those projects have been canceled due to economics, meaning no paying customers willing to lock-in longterm contracts at a profitable price point..

Those Peace region petition signers didn't submit a petition to those LNG companies that walked away because of economics..Funny eh..No petition urging Altagas to build regardless of economics, no petition to Altagas and or to Shell Canada telling them to ignore the economics, build build build and damn your bottom line..

Petronas is walking away anyway..Petronas is merely playing politics..

If Petronas builds, if..They won't put a shovel in the ground until 2020...The reason?..To coincide with the completion of Site C dam, oh indeed, Petronas wants that free hydro electric power...Free hydro-electric power for Petronas and a $15 billion dollar bill for residential BC Hydro customers..


Anonymous said...

Grant G you are absolutely wrong about one thing in your last comment and that is Shell Canada has NOT and I mean HAS NOT cancelled their plans on a LNG plant they still have to make the final decision which is reported to come out later this year. If it was your money wouldn't you do the same thing when you want to make a big purchase to make sure its the purchase that you want. In my books that is very huge difference from being cancelled. You write on a blog and not liking the criticism well let me tell you and all of you nay sayers have drank way and i mean way too much of the American corporation funded David suzuki hypocrite kool-aid to be anti-everything when it comes to people trying to make a living and keep small towns from becoming ghost towns which is happening.
My final words: YES TO LNG!!!! YES TO LNG!!!!!! YES TO JOBS!!!!!!! PEOPLE AGAINST THIS NEEDS TO GET A REAL JOB and open your eyes to see who is going to pay for the billions of unnecessary deficit that the know nothing about economics drama teacher of a prime minister that our country currently has, instead of being paid to say NO which no one can ever tell me that it does not happen.....

Grant G said...

Hello anonymous 11:29 am....You seem confused...A company will make a final investment decision, what makes you think the decision is YES...It will be NO..they won't start building until 2020, or never...Did you read this..another LNG project cancelled because of no buyers..

Spanish energy giant Repsol has halted plans to add liquefied natural gas export facilities at its existing Canaport LNG import terminal in Saint John, Canada.

“The Saint John LNG liquefaction project has been placed on hold,” Brent Anderson, a spokesman for Repsol Canada told LNG World News in an emailed statement.

Repsol joins a growing number of companies that are delaying or cancelling their LNG developments due to market volatility and low oil and gas prices.

“Current market conditions and project challenges make it unattractive for third-parties and off-takers to join the project,” Anderson said.

Saint John LNG Development, a unit of Repsol, received in September last year a licence from Canada’s NEB to export up to 8.86 bcm of gas per year for a period of 25 years from the proposed 5 mtpa LNG facility.



Do you need more, another LNG terminal cancelled..


According to Amien Sunaryadi, Chairman of SKK Migas, Inpex notified the regulator that it plans to downsize its workforce in Indonesia of around 400 by at least 40 percent as an agreement on the revised Masela plan of development (POD) had not yet been reached.

Shell engineers working on the giant LNG project had also been told to look for other work within the company, he said.

Inpex pushed the final investment decision on the project until 2020, meaning that the LNG project will not be operational until at least 2026, around two years before the companies’ contract is due to expire.

The Japanese company submitted to SKK Migas of Indonesia in November last year a revised plan of development of the Abadi LNG project, as a result of a greater volume of natural gas reserves being confirmed.



Sorry to burst your balloon...Economics say no, shareholders say no..no gas market until 2025 or later...