PNW LNG president and CEO Adnan Zainal Abidin said that a global glut of LNG is affecting PNW’s decision timing.

Pacific NorthWest LNG president talks FID timing

Pacific NorthWest LNG (PNW LNG) president and CEO Adnan Zainal Abidin spoke last week in an exclusive interview with the Northern View

Pacific NorthWest LNG, its consortium leader Petronas, as well as other investors, are waiting for a ‘suitable time’ for gas and oil prices to prove favourable before making a final investment decision.

Pacific NorthWest LNG (PNW LNG) president and CEO Adnan Zainal Abidin spoke last week in an exclusive interview with the Northern View. Abidin said that the current glut of the world’s LNG is having an impact on the timing of any final investment decision (FID).

“LNG prices are closely linked to oil prices, so I think No. 1, [attractive] oil prices certainly make the project viable, No. 2 is about the amount of LNG in the market at the moment,” said Abidin.

“There’s a glut of LNG at the moment, so I think our shareholders will have to see when will be a suitable time when they are able to update the LNG, because at the moment I think there’s a glut in a way that has also affected prices.”

Business News Network’s Jameson Berkow highlights the drastic difference in natural gas prices in a span as short as two years in a recent column.

“As recently as 2014, the spread between North American and Asian natural gas prices was as high as $16 per million British thermal units (mBTU). That meant LNG proponents could buy gas produced here, liquefy it and ship it across the Pacific Ocean for multiples of the price they paid here,” Berkow wrote.

“Fast forward to 2016 and that spread has collapsed by more than half and is currently fluctuating at between $6 and $8 per mBTU.”

Canadian Association of Petroleum Producers president and CEO Tim McMillan also said the drop in oil and gas prices has been significant in his recent address to the Prince Rupert and District Chamber of Commerce this past summer.

“We have seen a dramatic pullback in the capital expenditure in the oil and gas industry. It’s by far the largest investor in the Canadian economy,” McMillan said. In the last two years, oil has dropped from more than $100 per barrel to the mid-20s as recently as January, to the $45-50 range now, he said.

“We estimate about 100,000 to 110,000 Canadians have been laid off because of the low price environment that we’re currently in and it’s a very challenging time.”

In July, Shell delayed its FID indefinitely for its LNG Canada project in Kitimat after it was scheduled to make a decision by the end of 2016.

At the moment, officials at PNW LNG are evaluating the conditions imposed by the federal government on the Lelu Island project, and Abidin had found no outstanding surprises in the conditions as of last week.

“I think our team will need a bit of time to see what works and then analyze the impact of those conditions to the project before we report the recommendations to the shareholders … Some of it, we have probably anticipated and we’re now looking to see the impact of those conditions to the project,” the president said.

A cap of 4.3 million tonnes of carbon dioxide emissions per year was placed on the project, and the PNW technical team is still evaluating whether that can be met and reduced from the proposed 5.2 million tonnes in the original design, said Abidin.

When asked if the company is frustrated with the multiple delays in the Canadian Environmental Assessment process over the past two years, Abidin was understanding of the processes involved.

“We understand that the government has to undertake a robust process to ensure all the stakeholders are taken care of, and we are thankful that the government has come to a decision and a positive one for us,” he said.

The president was also asked if he feared the project would become tied up in court cases.

“We will continue to work with First Nations and continue to engage with First Nations to see how we can move the project forward expeditiously,” Abidin said.

“I think we’d like to take the opportunity to thank all those parties who are First Nations and the municipal and B.C. governments throughout the process. We engaged all parties and are grateful for the support given to us and we look forward to their continued support in moving this project along.”

 

Just Posted

Another windstorm expected Monday, causing ferry delay

With another windstorm expected to hit Haida Gwaii on Monday afternoon, BC… Continue reading

Grim situation in coming year for northwest, B.C. fisheries

Annual post-season review in Prince Rupert informs DFO on how to manage 2019 fishing season

Nurses wanted, Northern Health promotes Prince Rupert in new video

There are 38 nursing job positions available in the area

Charles Hays Secondary students steal the show

Students put on a production of 9 to 5 the musical at the Lester Centre

Heart of Our City: From the boat to the classroom

Rod Hikida has taught generations of Prince Rupert Students

Prince Rupert Rampage host Teddy Bear night

The Prince Rupert Rampage teamed up with the Salvation Army to give back this weekend

Shop Prince Rupert is back

These businesses are all taking part in the Shop Prince Rupert event until December 21 at noon

Break-in at home of detained Chinese Huawei executive

Meng Wanzhou was detained in Vancouver on America’s request

Natural gas rates will go up in B.C. on Jan. 1

Regions could pay up to $68 more

Top House Dems raise prospect of impeachment, jail for Trump

It could be an “impeachable offense” if it’s proven that President Donald Trump directed illegal hush-money payments to women during the 2016 campaign.

Macron addresses France amid protests; is it too late?

Paris monuments reopened, cleanup workers cleared debris and shop owners tried to put the city on its feet again Sunday.

CUPE calls off Flair Airlines job action citing job security concerns

The union says it’s going to challenge Flair’s move at the Canada Industrial Relations Board before proceeding with any job action.

Trump looking at several candidates for new chief of staff

Trump’s top pick for the job, Nick Ayers, is out of the running and Trump is now soliciting input on at least four individuals.

Canadian physicist collects Nobel Prize

Canada’s Donna Strickland is one of three winners of this year’s Nobel Prize for Physics.

Most Read