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BC LNG Lost Its Window of Opportunity, Study Finds

May 23, 2015

BC LNG Lost Its Window of Opportunity, Study Finds

Projects unlikely to be economic for another decade: Oxford Institute energy report.

The window of opportunity to capture Asian gas markets has eluded proposed liquefied natural gas projects in British Columbia, and as a consequence it is unlikely that any LNG projects will likely be commissioned or economic for another decade.

That’s the central conclusion of a new study on the prospects for natural gas extraction and export in Canada by the London-based Oxford Institute for Energy Studies released earlier this month. The institute operates as a non-profit charity that has looked at the economics and politics of energy since 1982.

Despite large volumes of shale gas and government hype over the industry, the study found that changing energy markets, global price volatility, increased competition, and LNG cost overruns have dramatically changed the demand picture for high-risk and capital intensive LNG projects around the world.

Even Asian demand for natural gas has softened significantly over the last year. Demand for imported gas in Japan is now “flat,” and in Korea it has “dampened,” the report says.

China’s thirst for natural gas has also slackened since 2010 due to pipeline expansions and the signing of long-term LNG contracts.

According to Cambridge Energy Associates, spot LNG imports into China dried up last summer, “and spot prices last winter, usually a peak demand season, were reported to be less than $7 per million BTU, from as high as $20 several years ago.”

 

(The BTU is a standard unit of energy which represents the amount of heat energy needed to raise the temperature of a pound of water by one degree Fahrenheit. It is equal to 1055 joules, another common energy measurement.)

Furthermore, LNG construction in the United States, Australia and other countries will be bringing more gas to global markets between 2015 and 2020, explains the Oxford Institute study.

…click on the above link to read the rest of the article…

 

 

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