David Keane

David Keane

Q&A: B.C. ‘still on track for LNG exports’

David Keane, head of B.C.'s new liquefied natural gas industry group, remains confident despite slump in energy prices

A sharp drop in oil prices and continued low natural gas prices have led to reduced forecasts of drilling activity in Western Canada for 2015. In Victoria, critics of the B.C. government’s push for liquefied natural gas exports have begun to claim that delayed investment decisions by LNG producers are the beginning of the end for the industry in B.C.

David Keane, president of the BC LNG Alliance, has worked for major industry players and now represents an association of seven international proponents, Kitimat LNG, LNG Canada, Pacific Northwest LNG, Prince Rupert LNG, Triton LNG, Woodfibre LNG and ExxonMobil. This week he discussed B.C.’s prospects with Black Press legislature reporter Tom Fletcher.

TF: What’s the impact of the recent low oil prices on these kinds of investments?

DK: I remind people that these companies are not going to be making long-term economic decisions based on the spot price of crude oil, regardless of whether it is $120 a barrel or $45 a barrel. They’re going to make their long-term economic decisions based on their long-term forecasts.

I still think that B.C., in spite of the fact that the price of oil has come down, is in a very good position to be able to capture some of the increasing demand for LNG that’s going to be taking place over the next decade. There are a number of reasons for that.

We have a tremendous natural gas supply base, we have a highly educated workforce, we have a very supportive provincial and federal government in terms of producing the natural gas, developing LNG facilities and exporting it to the big Asian markets.

Another point I think is worth noting is that we’re in competition with the U.S. Gulf Coast, Australia, East Africa, Middle East and Russia, and when you look the North Coast of B.C., we get about a 25 per cent increase in production capacity simply because of the colder ambient temperature. So the same amount of investment that you might make in Australia or East Africa or the U.S. Gulf Coast, in British Columbia you get a 25 per cent uplift in production.

Last but not least is the proximity to Asian markets. When you look at how close we are to those markets, I firmly believe that we’re going to capture a good bit of the increasing demand that will occur in Asia.

TF: Premier Christy Clark refers the U.S. being our big competition now. Shell recently made a decision to cancel an Australian project and indicated they were concentrating on B.C. and a U.S. site. Is the U.S. the main competition?

DK: I think so right now. When you look at the U.S. Gulf Coast, their LNG tankers have to go through the Panama Canal, and there are still long distances to get to the Asian markets.

TF: One barometer of how things are going is gas drilling activity in Northeast B.C. Can you comment on that?

DK: If we get just one of these large LNG facilities to declare a final investment decision, that will require the largest single investment ever in British Columbia. And I’ve been saying when I’m asked that we’ll get seven, because we have seven members, that will go to final investment decisions over the next few years, and I think that will increase drilling activity dramatically.

We have our internal market in Canada, and our external market is the United States, where the demand for Canadian natural gas is declining. So we have to find a way to get our natural gas to market, which is liquefaction and transporting it to market, primarily across the Pacific.

TF: Your alliance is beginning an advertising campaign. What’s the focus of that?

DK: The advertising campaign is meant to help inform British Columbians about what natural gas is, how it’s safely produced and safely transported. It has been safely transported in B.C. for 60-plus years. It’s to help inform people about the benefits that will accrue to the province and to them as a result of development of a robust LNG industry, and about all of the safety aspects, from natural gas production, to pipelines to the liquefaction facilities themselves, to the marine transportation of LNG.

TF: Are pipeline rights of way being settled?

DK: Chevron just concluded its 16th agreement with the 16 First Nations that are along the Pacific Trails pipeline, which will serve Kitimat LNG. All of the pipelines are working hard with their First Nations partners and I think that if we as an LNG industry can demonstrate long-term sustainable, real economic value to the First Nations, and when we demonstrate that LNG can be produced in a safe and environmentally sound manner, I think First Nations will support the development of the industry.

TF: The new CEO of Petronas is coming over for another visit soon. Is that an indication that they’re getting close, or that this slump in oil prices isn’t as big a deal as some people make it out to be?

DK: I can’t talk specifically about that. But I’m encouraged by what I see with all of our members, in terms of the work that they’re doing to move their projects forward.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Butter and sourdough bread is shown at a house in Vernon, B.C. on Wednesday, February 24, 2021. A Quebec dairy farmers’ group is calling on milk producers to stop feeding palm oil or its derivatives to livestock as controversy churns over how these supplements affect the consistency of butter. (THE CANADIAN PRESS - Jesse Johnston)
Poll: Care to spread your feelings on butter?

Reports of hard butter have rattled the Canadian dairy industry

A dose of COVID-19 vaccine is prepared at a vaccination clinic in Montreal’s Olympic Stadium on Tuesday, Feb. 23, 2021. THE CANADIAN PRESS/Paul Chiasson
39 new cases of COVID-19 in Interior Health region

The total number of cases in the region since the pandemic began is now at 7,334

Arrow Lakes Caribou Society said the new caribou pen near the Nakusp Hotsprings is close to completion. (Submitted)
Maternity caribou pen near Nakusp inches closer to fruition

While Nakusp recently approved the project’s lease, caribou captures are delayed due to COVID-19

Illuminate Spirit Revelstoke Society said Revelstoke’s dark downtown core is unwelcoming. Lighting would make it more inviting and a point of interest. (Liam Harrap/Revelstoke Review)
New community group hopes to ‘light up’ Revelstoke

Illuminate Spirit Revelstoke Society aims to purchase decorative lights for the downtown core

Kootenay-Columbia MP Rob Morrison speaks during Question Period in the House of Commons. File photo.
Kootenay-Columbia MP supports motion condemning Uighur genocide

Rob Morrison says labelling Uighur persecution as a genocide sends a message to Chinese government

Abbotsford’s Kris Collins turned to TikTok out of boredom when the provincial COVID-19 lockdown began in March 2020. She now has over 23 million followers on the video app. Photo: Submitted
Internet famous: Abbotsford’s Kris Collins is a TikTok comedy queen

Collins has found surprise stardom alone with a phone

Kamloops Fire Rescue battled a landfill fire which belched toxic smoke into the air on Feb. 27. (City of Kamloops Photo)
Fire at Kamloops landfill sends thick black smoke into the air

Firefighters made slow progress on the fire throughout the morning.

A Vancouver restaurant owner was found guilty of violating B.C.’s Human Rights Code by discriminating against customers on the basis of their race. (Pixabay)
Vancouver restaurant owner ordered to pay $4,000 to customers after racist remark

Referring to patrons as ‘you Arabs’ constitutes discrimination under B.C.’s Human Rights Code, ruling deems

Approximate location of the vehicle incident. (Google Maps)
Vehicle incident blocking Coquihalla traffic in both directions

Both directions of traffic stopped due to vehicle incident

(HelloKelowna - Twitter)
West Kelowna billboard bearing anti-vaccine messaging deemed misleading

Ad Standards investigated the billboard, noting a lack of evidence to support the messaging

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Baldy Mountain Resort is temporarily closed following the death of a resort family member. Pictured above is a sunrise at the resort, Feb. 19, 2021. (Baldy Mountain Resort/Facebook)
Baldy Mountain ski hill closed following death of resort family member

Authorities currently investigating, resort set to reopen Sunday, Feb. 27

RCMP. (Phil McLachlan/Capital News)
Chase RCMP arrest intoxicated man running into highway traffic

The man was wanted on several warrents in Alberta; was held overnight but released

Nanaimo children’s author and illustrator Lindsay Ford’s latest book is ‘Science Girl.’ (Photo courtesy Lindsay Ford)
B.C. children’s writer encourages girls to pursue the sciences in new book

Lindsay Ford is holding a virtual launch for latest book, ‘Science Girl’

Most Read