Pacific NorthWest LNG addresses final investment decision, impact of oil prices

Here’s an article from The Northern View about Pacific Northwest LNG possibly making a final investment decision early this year.

by  Shaun Thomas – The Northern View
posted Feb 12, 2015 at 10:00 AM— updated Feb 12, 2015 at 1:12 PM


Pacific NorthWest LNG may have delayed a final investment decision last year, but community relations advisor Derek Baker told Port Edward council work on the project are still very much alive.

“We deferred that decision for a number of different reasons, including not having regulatory approval and other approvals from the government. There is a view that once we are done the environmental assessment process that is it, but really there are a number of other permits through other agencies that we need to get as well,” he said at the Feb. 10 meeting, noting there is no definitive timeline for a decision.

“We really are hesitant to put a date on it because we are not in control of what the clock is, it’s to their [Canadian Environmental Assessment Office’s] discretion. If there is an additional information request that could stop. I don’t know what day we’re on, but we’re a good portion of the way through and we’re certainly hopeful for a decision this year … the early part of this year.”

Baker said a positive investment decision would begin the ramp up of a four or five year construction window that would peak with 4,500 workers, but the first step would be deciding which company and which design would move forward.

“Following an investment decision we would look at selecting our engineering, procurement and construction contractor. There are three companies that we are currently reviewing bids from, which are Bechtel, Technip and KBR. We would anticipate announcing which contractor we would be engaging following the final investment decision,” he said.

While some have expressed concerns about the liquefied natural gas industry due to the drop in global oil prices, Baker said the company isn’t as concerned about what is happening at the moment.

“Oil prices are something that we have to take a look at, but the thing is that this is a long-term project. We anticipate being in operation in 2019, so we’re not really looking at what the oil price is doing today in a small window of time. We’re looking at what it is going to be doing in the years moving forward. With no regulatory approval, we have been granted time to take our time and see what those scenarios could look like,” he said.

“While that does create a little bit more caution on mega-projects, if a project is economical in its own right then it is likely to proceed.”