LNG Industry In Freefall; Prices Collapsing And Projects Canceled Or Delayed Around The World
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At least 10 global LNG projects, including projects in Australia, the U.S., Mozambique, Qatar, Mauritania and Senegal, have been put on hold over the past month. “They don’t quite recognize that their economic heart has stopped beating,” Williams-Derry said, noting that none have officially been cancelled.
On March 30, Royal Dutch Shell — the company with the biggest share in LNG Canada at 40 per cent — announced it would pull out of a proposed LNG project in Lake Charles, Louisiana, leaving the project in the hands of a second investor.
In most cases, project delays were pinned on the novel coronavirus, “while ignoring the fact that LNG prices were already deflating long before the worst impacts of the pandemic were being felt,” Williams-Derry wrote in an analysis for the U.S. Institute for Energy Economics and Financial Analysis. “The LNG industry thought it had a clear crystal ball,” he said in an interview. “LNG demand was rising. Asian demand was rising. And that gave them a clear pathway to profits.” “Now there are more risks and more uncertainty than anybody had anticipated.”
Thirteen LNG export facilities are currently proposed for Canada — seven in British Columbia, four in Nova Scotia and two in Quebec. The LNG Canada project is the only one that has begun construction, building an export terminal in Kitimat and the Coastal GasLink pipeline that will feed it. But the COVID-19 pandemic is tarnishing project aspirations in Canada as well as abroad. On April 16, Calgary-based Pieridae Energy Ltd. said it would delay making a final investment decision for its proposed $10-billion LNG export facility in Nova Scotia because of depressed markets for LNG and the pandemic.
Pieridae CEO Alfred Sorensen said the company will continue to lobby the federal and provincial governments for $1 billion in financial assistance to help build its Goldboro LNG project on the eastern shores of Nova Scotia, which would liquefy Alberta gas for export.
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https://thenarwhal.ca/what-rock-bottom-natural-gas-prices-mean-for-canadas-aspiring-lng-industry/
