Wednesday, October 29, 2014

When "prudent" becomes "pause": BG announces pause for Prince Rupert project

The rumblings of a shift in time lines for LNG development of Tuesday became the thing of possible delays of up to ten years by Wednesday, as the BG Group delivered a bit of a setback for the region's LNG aspirations.

As we outlined in our item of yesterday,  the BG Group released its third quarter report on Tuesday, with some significant financial declines to report and with it a cautionary outlook for it's Canadian plans.

By Wednesday morning, a wide collection of Financial news services were reporting that the British based energy giant was look to put it's Prince Rupert LNG project on pause, while they assess how the conditions in the LNG market evolve towards 2020.

A transcript of a conference call regarding BG's third quarter results and prospects world wide outlined the current view on Prince Rupert, with Interim Chairman of BG Andrew Gould advising that the company isn't abandoning Prince Rupert, but at this point pausing on Prince Rupert.

On Price Rupert, as I’m sure you’ve seen that estimated volumes of LNG from the US have been calculated closer to 90 million tonnes per annum as opposed to the 60 million that was previously forecast. So as a result of this, coupled with weakness in gas pricing generally, there is a risk that the market be very well supplied post 2020. 

And all we’re doing at this point in time is pausing on Prince Rupert, we’re not abandoning Prince Rupert, we’re pausing on Prince Rupert to see how the market evolves particularly in function of total supply that will come out of the US. We will continue to work on the project but not at the same rhythm as perhaps we were working in 2014. -- Interim BG Chairman Andrew Gould on the company overview of Prince Rupert LNG and their plans to pause development.

You can review the full transcript of that conference call here, it provides a fair bit of insight as to the nature of the business decisions that BG make and what factors they take into account as they review their world wide LNG ambitions.

The Prince Rupert LNG project is one of eight LNG terminal developments proposed for the immediate Prince Rupert area, you can review our items on all of those here.

As well, you can access our past items related to the BG project for Prince Rupert here.

As for the news of the Prince Rupert decision, reviews of the news of the pause of the LNG plans for British Columbia is making for a growing archive of articles.

Most of which suggest that a delay into the next decade may be in the LNG cards for the BG Project. You can review those articles below, we'll update the list as further items become available.

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