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  #341  
Old Posted Sep 14, 2016, 7:43 AM
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Finally. And I mean finally! The fed CEAA will issue enviro certification on or before October 2 for the proposed Petronas LNG consortium (within 2 weeks) and that includes federal cabinet approval as well. About 1 1/2 years overdue IMHO.

Yep. A $36 billion project all-inclusive.

But will the Petronas consortium proceed with final FID thereafter one may ask?

My take? Yep. Definitely. Why? Consortium already has ~$20 billion in capex already invested.

~2 weeks ago, a Petronas VP in Kuala Lumpur confirmed that they are "committed" to proceeding.

Just last week, fed natural resources minister Carr was in New Delhi and, Indian Oil (PNW LNG partner) implored fed minister Carr to expedite the CEAA enviro certification.

Frankly, all consortium members have been frustrated at this lengthy regulatory delay, which commenced back in spring, 2013 - ~3 1/2 years ago. Should not have taken that long on a "365-day" CEAA "clock".

Thereafter, the proponents will review the project overall (looking at lower re-submitted construction/procurement bids) and, I highly suspect, final FID will be issued in December. Remember, the Petronas consortium members are all essentially "off-takers". IOW, not selling into the "open" market in terms of spot price or long-term contractual JCC-linked buyers.

Good news.
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  #342  
Old Posted Sep 14, 2016, 4:18 PM
MalcolmTucker MalcolmTucker is offline
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Originally Posted by Stingray2004 View Post
Finally. And I mean finally! The fed CEAA will issue enviro certification on or before October 2 for the proposed Petronas LNG consortium (within 2 weeks) and that includes federal cabinet approval as well. About 1 1/2 years overdue IMHO.

Yep. A $36 billion project all-inclusive.

But will the Petronas consortium proceed with final FID thereafter one may ask?

My take? Yep. Definitely. Why? Consortium already has ~$20 billion in capex already invested.

~2 weeks ago, a Petronas VP in Kuala Lumpur confirmed that they are "committed" to proceeding.

Just last week, fed natural resources minister Carr was in New Delhi and, Indian Oil (PNW LNG partner) implored fed minister Carr to expedite the CEAA enviro certification.

Frankly, all consortium members have been frustrated at this lengthy regulatory delay, which commenced back in spring, 2013 - ~3 1/2 years ago. Should not have taken that long on a "365-day" CEAA "clock".

Thereafter, the proponents will review the project overall (looking at lower re-submitted construction/procurement bids) and, I highly suspect, final FID will be issued in December. Remember, the Petronas consortium members are all essentially "off-takers". IOW, not selling into the "open" market in terms of spot price or long-term contractual JCC-linked buyers.

Good news.
A good part of that CAPEX would be easily sold and recovered, or held to supply the North American market.
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  #343  
Old Posted Sep 18, 2016, 12:20 AM
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A good part of that CAPEX would be easily sold and recovered, or held to supply the North American market.
Completely disagree. That ~$20 billion CAPEX was completely geared toward LNG export (PNW LNG) - the only way for the Petronas consortium to economically monetize it's asset.

Nat gas producers in BC/AB are struggling with current AECO Hub spot price of C$2.76/mcf. Furthermore, the Marcellus shale in the U.S. is exporting nat gas into Ontario and the rest of eastern Canada taking away BC/AB nat gas market share. Any wonder why TransCanada wants to convert its nat gas mainline to carry bitumen to eastern Canada (Energy East)?

And the NEB confirms that CA exports of nat gas to the U.S. are dwindling - almost exponentially due to the explosion of U.S. shale gas resources.

Again, your hypothesis does not withstand scrutiny.

Back to the Petronas' consortium's PNW LNG proposal and some facts/timeline:

1. March, 2016 - PNW LNG moves to new and expanded premises comprising 34,000 sq. ft. on two floors in Park Place (downtown Van City);

2. May, 2016 - Existing PNW LNG prez Michael Cuthbert tells Reuters that "Depending on the timing of the CEAA (Canadian Environmental Assessment Agency) decision, we would hope that by late summer or early fall we would be in a position to follow up on FID";

3. May, 2016 - Adnan Zainal Abidin, from Peteronas' HQ in Kuala Lumpur, appointed President and CEO of PNW LNG - has spent his career with Petronas and brings global LNG project management and construction expertise in anticipation of forthcoming CEAA certification/FID;

4. June, 2016 - CEAA confirms that all outstanding enquiries on enviro assessment have been satisfied by Petronas. A previous draft CEAA report on the Petronas LNG project confirmed that it would have no (or minimal) impact upon salmon fisheries on Flora Bank;

5. June, 2016 - Fed natural resources minister James Carr confirms, in a California scrum, that the fed cabinet will make a final decision on the Petronas LNG project between Sept. 15 - 30 as the CEAA "clock" will have run out by then; All fed indications, to date, confirm that PNW LNG will be green-lighted;

6. September, 2016 - “We are committed at the moment, but first we need to see what the conditions of [CEAA] approval are” stated Arif Mahmood, Petronas downstream CEO and group executive vice-president in Kuala Lumpur;

7. September, 2016 - Canadian natural resources minister Jim Carr visits New Delhi, India and Indian Oil (Petronas PNW LNG consortium member) implored Carr to issue CEAA certification;

8. October 2, 2016 - by statute, the last day CEAA/fed cabinet can issue CEAA/cabinet approval for the Petronas consortium's PNW LNG project;

9. Very likely a positive CEAA certification. Thereafter the Petronas consortium will review CEAA conditions and the entire PNW LNG project in general - inclusive of likely re-issuing tenders for new bids.

10. May 10, 2017 - last day Petronas consortium able to make FID. Why? On September 15, 2016, the NEB granted a one-year extension to the North Montney pipeline project by TransCanada as the delayed CEAA certification for PNW LNG resulted in a delayed FID thereto. Construction on the North Montney mainline could not be commenced until those two latter factors were completed.

PNW LNG issued a firm letter of support to the NEB supporting the one-year extension in order "to protect their substantial investment to date".

Ergo, the NEB requires that PNW LNG issue FID by no later than May 10, 2017.

http://news.gc.ca/web/article-en.do?...29&crtr.tp1D=1

So there we have the window for final FID by the Petronas consortium - between October 3, 2016 and May 10, 2017. The Petronas consortium already gave conditional FID in June, 2015 (subject to CEAA certification). Since Petronas has a previous history of issuing final FIDs during the month of December - that's where my hunch lies right now - December, 2016 at the earliest.

Last edited by Stingray2004; Sep 18, 2016 at 3:32 PM.
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  #344  
Old Posted Sep 18, 2016, 3:18 AM
MalcolmTucker MalcolmTucker is offline
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The capex is not unrecoverable or stranded without LNG. Unlike let's say Sakhalin where there is no local market. The local market can carry the asset, around $11 billion spent for and by progress if you count that spending as purely for LNG, and I would say generously another billion in regulatory and engineering processes. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/pacific-northwest-lng-project-waiting-on-liberals-conditions/article31284484/?service=mobile


I doubt we will see cargos until ten years from now. When everyone with offtake needs can buy spot cargos for less than the Canadian refrigeration costs, I suspect even the FID will be a go slow option.
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  #345  
Old Posted Sep 18, 2016, 4:13 PM
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Originally Posted by MalcolmTucker View Post
The capex is not unrecoverable or stranded without LNG. Unlike let's say Sakhalin where there is no local market. The local market can carry the asset, around $11 billion spent for and by progress if you count that spending as purely for LNG, and I would say generously another billion in regulatory and engineering processes.
PNW LNG CAPEX to date:

1. June 2011 - Petronas invests $1.1 billion in a nat gas field, owned by Progress Energy, in NE BC's Montney basin to pursue future LNG exports;

2. June, 2012 - Petronas makes takeover offer of $5.5 billion for Progress Energy. Another unnamed suitor makes a rival offer. Petronas later ups offer to $6 biliion for Petronas (a 80% - 90% premium over TSX). BTW, unnamed suitor turns out to be ExxonMobil, which later purchases Celtic Exploration (with major NE BC Montney basin lands position) for $3.1 billion for its own future LNG facility requirements;

3. November, 2013 - Petronas expends another $1.5 billion to purchase lands from Talisman in the Montney basin in NE BC;

4. March, 2014 - Petronas completes another Montney basin purchase in NE BC for $130 million;

Petronas LNG CAPEX to date: ~$8.7 billion.

5. Pre-FEED (front-end engineering and design) completed - $hundreds of millions (utilizing PWC [PriceWaterHouseCoopers] global LNG industry standard expenditure);

6. FEED - Petronas utilized 3 separate FEED engineering consortiums for project. According to PWC... global LNG industry standard expenditure of $1 billion+ per FEED: $3 billion;

Petronas LNG CAPEX to date: ~$12 billion;

7. Petronas (Progress Energy upstream) commences drilling in 2013 terms of "proving up reserves" for its proposed LNG facility. From 2013 - 2015, expends another $~7 billion ($2 billion/$2.5 billion/$2.5 billion); Petronas had just an initial pre-FID goal of 15 trillion cubic feet of proven nat gas reserves - they surpassed same at over 20 trillion cu. ft. As a rule of thumb, 1 trillion cubic feet of proven nat gas reserves is required for every 1 million tons per annum LNG for a 20 year period.

8. Add in another ~$1 billion for 3 1/2 years for CEAA regulatory work, additional drilling to date, etc., etc.

Petronas LNG CAPEX to date: ~$20 billion;

That's "major coin" and the Petronas consortium also has "major skin" in their proposed BC LNG project. They certainly did not expend same for AECO Hub nat gas sales. The remaining CAPEX outlays after final FID:

1. ~$11 billion for west coast LNG terminal on Lelu Island; (Petronas consortium CAPEX)

2. Trans-Canada Pipelines CAPEX:
a) ~$6 billion Prince Rupert Gas Transmission pipeline project;
b) $1.4 billion North Montney mainline;

And, ergo, the total ~$36 - $37 billion Petronas consortium CAPEX is summarized above... the same CAPEX figure as reported by the MSM over the years.

BTW, the tolling charges payable toward TCP by PNW LNG? More than made up for by the "ambient temp." in Prince Rupert. Comparatively speaking, LNG terminals in Texas, Australia, Qatar, Africa, etc. typically suffer from extreme heat (unlike relatively cool Prince Rupert). Think of placing a freezer outside in 30C+ temps and the cost of operating same.

Quote:
Originally Posted by MalcolmTucker View Post
I doubt we will see cargos until ten years from now. When everyone with offtake needs can buy spot cargos for less than the Canadian refrigeration costs, I suspect even the FID will be a go slow option.
The global LNG biz is much more complicated than that. You have your LNG tolling model (U.S.), your fully integrated model (Australia, Canada, etc.) and a subset thereto - partial off-takers/mostly off-takers. Just for starters.

Unlike other global LNG majors that rely upon 90% of their capacity on JCC-linked long-term contracts with a 13% - 14% price slope, with the remaining ~10% or so capacity available for the spot market... these matters are not material to the Petronas LNG consortium as it involves off-takers themselves and will also be utilized for Petronas' own internal obligations.

The spot market is a small portion of the overall global LNG market and, with over-supply over next several years, yes some off-takers will take advantage of same. However, other complex LNG matters come in to play involving CAPEX per million ton installed LNG capacity, annual upstream OPEX, shipping costs, security of supply, diversity of supply, geo-politics, etc., etc.

And when the Petronas consortium issues final FID (December, 2016 is my guess)? Will take 5 years and 4 months (CEAA filings) before LNG can be shipped, which means sometime in mid-2022. And the global LNG supply is projected to be in negative territory in 2022 as well (not really material for the Petronas LNG consortium though):


Last edited by Stingray2004; Sep 18, 2016 at 4:24 PM.
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  #346  
Old Posted Sep 28, 2016, 2:38 AM
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The feds have given conditional approval for the massive Petronas project!
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  #347  
Old Posted Sep 28, 2016, 3:09 AM
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Originally Posted by Denscity View Post
The feds have given conditional approval for the massive Petronas project!
Great news, but it seems these days approved never really means approved! Northern Gateway was approved too.

So this includes the pipeline as well?

http://www.cbc.ca/news/politics/paci...ject-1.3780758
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  #348  
Old Posted Sep 30, 2016, 8:06 PM
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...and here's how Petronas is reacting to the approval:

http://www.cbc.ca/news/business/petr...ject-1.3785389

Quote:
Malaysian state oil firm Petroliam Nasional Bhd is considering selling its majority stake in a $27-billion Canadian liquefied natural gas (LNG) plant, three people familiar with the matter said this week.
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  #349  
Old Posted Sep 30, 2016, 9:45 PM
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It's beginning to look like Canada is going to miss out on the LNG boat so to speak. I'm remaining optimistic but if this project doesn't proceed I don't know how any of the others will either, this one was the best bet in my books. It will be sad if true, and another frustrating chapter in Canada's history of delaying and dragging things out until it's too late and someone else beats us to it.
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  #350  
Old Posted Sep 30, 2016, 11:26 PM
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Originally Posted by lubicon View Post
It's beginning to look like Canada is going to miss out on the LNG boat so to speak. I'm remaining optimistic but if this project doesn't proceed I don't know how any of the others will either, this one was the best bet in my books. It will be sad if true, and another frustrating chapter in Canada's history of delaying and dragging things out until it's too late and someone else beats us to it.
This. Although the BC government claim the rumours are false, not that I trust much they say.

Petronas is not considering sale of proposed LNG terminal, B.C. government says
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  #351  
Old Posted Oct 1, 2016, 3:40 AM
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Caveat emptor to those who always buy into new articles with "unnamed sources". As a matter of fact, the earlier Reuters article is the 4th on the Petronas PNW LNG project, over the past few years, all with "unnamed" sources, which all later were proved to be incorrect.

Petronas statement:

Quote:
The Canadian Press
Published Friday, September 30, 2016 5:16PM EDT
Last Updated Friday, September 30, 2016 10:52PM EDT

VANCOUVER -- The Malaysian state-owned oil firm Petronas denies a report that the company was considering selling its stake in a multibillion-dollar liquefied natural gas project in British Columbia.

A statement from Petronas says it remains committed to working with its partners following a conditional approval from the federal government for the proposed Pacific NorthWest LNG project.

A news report indicated that the firm was pondering selling its stake, which company says it "categorically denies."
http://www.ctvnews.ca/business/b-c-s...inal-1.3096708
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  #352  
Old Posted Oct 4, 2016, 6:48 PM
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Well guys there are 2 sides to this coin.

If Petronas sells it is one thing but if someone buys it clearly they are reaffirming interest in the project.
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  #353  
Old Posted Nov 4, 2016, 11:08 PM
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Woodfibre LNG project is 'a go'

Pacific Oil and Gas takes final investment decision on $1.6 billion LNG plant in Squamish

BIV - Nov 4, 2016

https://www.biv.com/article/2016/11/...ng-project-go/

Quote:
“This project is a go.”

So said Byng Giraud, vice president of corporate affairs for Woodfibre LNG at a press conference in Squamish Friday, November 4.

By that he meant that the company behind the project, Pacific Oil and Gas, has taken a final investment decision on the project, now estimated to cost $1.6 billion to build – slightly less than originally estimated.
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  #354  
Old Posted Jul 25, 2017, 6:55 PM
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And after all that:

Pacific Northwest LNG is dead

What a waste of time, effort, money and opportunity.
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  #355  
Old Posted Jul 25, 2017, 6:57 PM
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And after all that:

Pacific Northwest LNG is dead

What a waste of time, effort, money and opportunity.
Bolded for truth.
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  #356  
Old Posted Jul 29, 2017, 2:21 PM
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Petronas, along with partners Sinopec, Japan Petroleum Exploration Co. Ltd., Indian Oil Corp. and PetroleumBRUNEI, deferred a final decision last December on the West Coast project as the company was not “satisfied that Canadian LNG, and our project in particular, was viable,” Culbert said.
That was from early 2015. This forum is as good an historical record as any on this project. The whole thing was in doubt from the Fall of 2014 on. It took till July 2017 to pull the plug. While government delays did occur over this period, it is not clear how much they influenced decisions on a project that was already at risk.
What is obvious was that Liberal boosterism of the project was disingenuous from that point forward.
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  #357  
Old Posted Aug 5, 2017, 4:51 AM
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LNG Canada aiming to reach export terminal decision in 2018: CEO

Aug 3, 2017
http://www.bnn.ca/lng-canada-aiming-...8-ceo-1.821951

Quote:
VANCOUVER -- LNG Canada, a joint venture led by Royal Dutch Shell Plc (RDSa.N), is aiming for an investment decision next year on building a liquefied natural gas (LNG) export terminal on British Columbia's coast, its chief executive said on Thursday.
Andy Calitz said work on the up to $40 billion project is "extremely active" and has not been slowed by Malaysian oil company Petronas' decision last week to scrap its LNG project in the Western Canadian province, nor by a recent change in provincial government.
Apparently Petronas may now have a 'non-operating', but supply interest in this proposal.
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  #358  
Old Posted Aug 6, 2017, 2:25 AM
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Originally Posted by craneSpotter View Post
LNG Canada aiming to reach export terminal decision in 2018: CEO

Aug 3, 2017
http://www.bnn.ca/lng-canada-aiming-...8-ceo-1.821951



Apparently Petronas may now have a 'non-operating', but supply interest in this proposal.
Correct.

Quote:
Petronas keen on a slice of LNG Canada

Malaysian state player maintains interest in country's gas sector with eye on stake in proposed Shell project in British Columbia.

MALAYSIAN state oil company Petronas is understood to have expressed interest in participating in the Shell-led LNG Canada project in Kitimat, British Columbia, despite having pulled the plug on its own Pacific NorthWest LNG project in the same province.

Industry officials said Petronas and its partners remain interested in developing gas assets in Canada. Taking a non-operated stake in LNG Canada would allow Petronas to take advantage of its position in Canada’s gas sector and add this emerging supply.
http://www.upstreamonline.com/hardco...-of-lng-canada
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  #359  
Old Posted Aug 6, 2017, 2:34 AM
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From a lay-persons perspective, isn't there still a huge untapped market for LNG in the future? There are still these large emerging countries like China India, Brazil, etc., that will be energy hungry. And with electric cars becoming more and more main-stream, energy consumption that is cleaner non oil based will be required for that as well.
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  #360  
Old Posted Aug 6, 2017, 3:52 PM
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Last edited by MalcolmTucker; Aug 29, 2017 at 4:58 PM.
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