The cancellation of a second liquefied natural gas export project on B.C.’s North Coast is a disappointment, but long-term prospects for the industry remain strong, B.C. Energy Minister Michelle Mungall says.
Chinese-owned Nexen Energy and its Japanese partner INPEX Gas B.C. announced Thursday the are cancelling their Aurora LNG project in the Prince Rupert area. This follows the July cancellation of a project backed by Petronas and its international partners for the same region.
RELATED: Aurora cancellation leaves eight B.C. projects on books
The change of government from the LNG-promoting Christy Clark B.C. Liberals to the NDP had nothing to do with the decision, Mungall said Tuesday. One of the NDP’s first acts on taking office was to cancel the annual LNG industry conference in Vancouver.
“When we spoke with Aurora LNG, they were very clear that this decision today is about global market pricing,” Mungall said. “Keep in mind that when a lot of the proposals came forward, we were looking at about $18 per million BTUs and now it’s at $6 per million BTUs, so we’ve seen a major plummet in global pricing, and that is the reason why Aurora made their decision.”
In 2015, the Chinese National Offshore Oil Corp. (CNOOC) closed a $15 billion deal for Calgary-based Nexen Inc., including extensive gas field developments in northeast B.C., before launching the Aurora project.
“They are continuing their plays in the Horn River basin, so they are not exiting B.C. as a whole, they are just cancelling their LNG project,” Mungall said.
“Every single player in the industry, every single company is saying that B.C. has some of the best natural gas in the world, and they are definitely committed to their projects.”
Eight more projects are ongoing, including LNG Canada, a proposal for the Kitimat area backed by Shell Canada, Korea Gas, Mitsubishi and PetroChina.