VANCOUVER – Premier Christy Clark’s dreams of a booming liquefied natural gas industry in British Columbia were dealt another blow Monday when a Shell-backed venture delayed a final decision indefinitely on a project in Kitimat.
Experts say LNG Canada’s decision to put the $50-billion project on hold amid weak global prices isn’t surprising, but it adds another dark cloud to an industry that already has a gloomy outlook.
Martin King, vice-president of institutional research at FirstEnergy Capital Corp., says a lack of Asian demand growth and price indexing to crude oil have dragged down the value of liquefied natural gas.
He says the profit margin for companies considering LNG projects on B.C.’s west coast is nowhere near as attractive as it was even 18 months ago.
Clark made a massive political bet on LNG in 2013 with promises of 100,000 jobs and $100-billion in revenue over decades, but one social policy professor doubts the industry’s failure to materialize will hurt her much at the ballot box next year.
Michael Prince of the University of Victoria says the province is in good financial shape without LNG and other issues including affordable housing are dominating the early campaign, but the NDP could still use the LNG issue to attack Clark’s Liberals.