LNG

Taxpayers as bagholders

Normzig, “No matter how many speeches are made or how many permits are issued and how many rainbow forecasts are shown, the only way BC is getting LNG plants anytime soon is if they build them with taxpayer money.”

 
Reuters, Clyde Russell, Launceston, Australia, June 9, 2016

Conventional wisdom in the liquefied natural gas (LNG) sector is that no new projects will be built for several years, given the vast cost can’t be reconciled with the current low prices.

The wave of LNG building in recent years has seen eight projects being built in Australia, with five now operating and the remaining three nearing completion, and five in the United States, the first of which has starting shipping cargoes.

The era of mega-LNG projects appears to be over, at least for now.

The average breakeven cost for the recent projects is $12.60 per mmBtu, a price well above the current levels.

Substantial volumes of additional LNG that can come to market in the coming years from existing facilities at considerably lower prices when compared to the huge cost of developing new plants …

lng

LNG World News, August 23, 2016:

The Alaska Gasline Development Corp, owned by the state of Alaska, said it plans to assume full management of the $45 billion-plus Alaska LNG Project by the end of this year.

…Once transitioned, the Alaska Gasline Development Corporation will be responsible for managing the project going forward including applying for regulatory approval, securing the commercial commitments from gas sellers, shippers, and buyers necessary to acquire the equity and debt financing that will be required to complete the project and prepare to start.

industry

Translation:

When we initiate creative ways for taxpayers to subsidize oil and gas, there’s nothing better than having another of their senior people help us transfer investment risks to the public while still ensuring that profits stay with the industry.

taxpayer


ADDENDUM:

Qatar may run $8 bn budget deficit: World Bank, Thomson Reuters, July 31, 2016:

Qatar is estimated to run a budget deficit of $8bn, equivalent to 5 percent of GDP in 2016 — the smallest among the GCC countries. Yet, given that the country’s budget planners calculated oil at $48, Qatar’s deficit may increase further, latest World Bank report on crashing oil prices noted.

The World Bank’s “Mena quarterly economic brief for July” noted the group of Gulf Cooperation Council (GCC) countries lost $157bn in oil revenues last year and is expected to lose another $100bn this year. In the Mena region, Saudi Arabia has depleted $178bn in reserves, followed by Algeria ($28bn), and Iraq ($27bn) in 2015.

Normzig:

Its interesting to see Qatar currently the world’s second largest exporter of LNG (formerly the first) is looking at an $8 billion usd deficit. 

This is a small country with less than 1/2 the population of BC. Even with fully functioning LNG infrastructure in place they are losing money at a record pace.

That would suggest Clark and Coleman might be a bit optimistic on BC’s future. Rich the dirigible Coleman is still claiming an LNG boom is on the way.

 

Categories: LNG

9 replies »

  1. Rich Coleman told Jon McComb a couple of weeks ago that BC would see hundreds of thousands of jobs and billions in government revenue from LNG “in his lifetime.”

    If he’s lying, holding him to account will be a tad problematic. Not that enough voters in Langley care; most would vote for him anyway after he came out of the taxidermist’s.

    Liked by 1 person

    • It’s what happens when name recognition is the biggest factor in getting elected. And, that’s why the partnerships between Liberals and Postmedia, Global, Corus, Black Press and Glacier Media are so valuable.

      As a result, no matter what lies Coleman tells, the lying does not get revealed in media.

      Another example? Bill Bennett provided assurance the $7.9 billion Site C budget was so well reviewed, it could not possibly change. Weeks later, BC Liberal representative Vaughn Palmer was describing why the budget had gone up by $600 million and days later, the budget had gone up $300 million more to $8.8 billion.

      Bennett’s October words were forgotten,except by readers here at In-Sights.

      https://in-sights.ca/2014/12/12/lies-my-energy-minister-told-me/

      Liked by 2 people

  2. If taxing LNG profits at the ridiculously-low agreed upon tax rate would result in the streets being paved with gold and a $100 billion prosperity fund for future generations to boot, think how big the prosperity fund could be if a LNG crown corporation were established and the entire profit accrued to the taxpayer. Not only that, LNG would be economically viable at even today’s low prices. Gosh, we could suspend BC Hydro “dividends” to the treasury and put hydro onto a firm financial footing.

    Liked by 1 person

  3. Hmmm, you might be on to something about the possibility of the Cristy liberals taking over the building of LNG facilities. I was in Kitimat a couple weeks ago, despite there being no signed finalized agreements to actually build any LNG facilities, and reports of big oil backing out of LNG investment in BC for the time being, there’s one hell of a lot of money being spent on LNG site prep going on in Kitimat right now…

    Liked by 1 person

  4. Horizontal fracking is an integral component of the LNG industry. If we legitimately give a damn about our environment we will tell this government and their friends at Petronas to get lost. I suspect I’m only spitting into the wind.

    Liked by 1 person

  5. Coleman migh be delusional or drunk or just plan doesn’t care anymore. any one who can read knows the days of making money out of LNG are done and over with for a very long time. lThere is a glut on the market. We were promised all those trillions and 100K jobs last election. well here we are and we still have the highest child poverty rate in Canada and the lowest min. wage. Doesn’t seem any of those “goodies” materialized. If Coleman wants to keep spouting that b.s. that’s fine, but if guys in white suits coming looking for him, he ought not to be surprised. if any one believes Christy and Coleman’s stories, I have a bit of “marsh” land, which would make a fine lake resort.

    Now if Coleman is peddling a story of “some day”, yes some day, its sort of like some where over the rainbow, blue birds smile, etc. and some day I might win the lottery in this life time. Perhaps in another 100 yrs the price of LNG might go up, but then there are all those fracking problems and a few too many fracks could start an earthquake in an earthquake prone zone and then with that Site C dam, not being all that solid, could be quite entertaining. sorry I won’t be around, but it might be fun to watch…….or not.

    Like

Leave a reply but be on topic and civil.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s