Changing market conditions & long regulatory delays contributed to the cancellation of the massive Pacific Northwest LNG project.
A $36 billion liquid natural gas project in British Columbia has been cancelled.
As noted by the Canadian Press, it “would have been one of Canada’s largest private infrastructure investments.”
It would have featured an export terminal that would compress natural gas into liquid before shipping it to Asia.
According to Anuar Taib – CEO of the oil and gas division of Petronas – the market is saturated with liquefied natural gas, and the resulting price decline made the project unfeasible.
Things could get even worse for B.C. As reported by the CP, “TransCanada later said it was reviewing its options on the $5-billion Prince Rupert Gas Transmission project, which was dealt its own setback last week after the Federal Court of Appeal ruled that the National Energy Board will need to reconsider whether it requires federal approval.”
While the B.C. Liberals tried to blame the new NDP government for the cancellation, that was quickly shot down by Petronas. “We actually look forward to working with John Horgan and his government as we develop our vast assets in the Montney joint venture area,” said Taib.
Of note, the CP report points out that the project was in “regulatory channels” for years, while other projects around the world got started. It’s possible that had the regulatory process been more streamlined and less bureaucratic, the project would have gone forward. For example, even when approved by the federal government, the project faced nearly 200 federal regulatory conditions.
Emphasize Canadian ownership
The project could have been a job creator and would have generated wealth in Canada. That said, the fact that it would have been owned by a foreign company (Petronas is from Malaysia) is less than ideal. While it would have been good to see the project go ahead, we need to focus on creating a more competitive business environment that lets Canadian companies prosper and compete on a level footing.
Currently, the environmental restrictions and rampant regulations being pushed by the elites render many projects too expensive, and make it difficult for smaller Canadian-owned companies to grow into a position of strength.
That has to change, and it will require a way of thinking that puts the interests of Canadian workers and Canadian companies first at all times – something that is sorely missing on the current political landscape.
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