REPORTING · 26th February 2016
Kitimat received bad news on Thursday, February 25th as the proposed Douglas Channel LNG project was announced to be shelved.
“[The announcement] was that the consortium, who was trying to develop this LNG project has decided to halt further development due to unfavourable market conditions,” said John Lowe, Executive Vice President of AltaGas, LTD.
This means the three companies are not going to pursue the project further. However, they agreed that individual members can still develop similar projects in Douglas Channel.
“AltaGas is interested in pursuing a project, but the market conditions have to improve to do that,” said Lowe.
He explained when they started the project, LNG was selling for $20 for one million British Thermal Units in Japan and this has dropped to under $5.
“We need a push from the market but AltaGas remains committed to try and pursue in Douglas Channel,” said Lowe.
The project would have benefited Kitimat. One of the promises which was being made by the project was it would reduce the cost of heating houses by lowering the natural gas utility rates for the clients of PNG West, which would have included Kitimat.
This project experienced a setback last year. They were hit with a 25% tariff on the import price for a floating LNG facility. Lowe explained went to the Canada Boarder Services Agency and had a favourable ruling which came in a few weeks ago. They would have 0% Duty.
“This doesn’t help us right now but it does make a future project much more viable,” said Lowe.