AltaGas halts Douglas Channel LNG project amid global supply glut
The project has the potential to export about 2.4 billion cubic metres of natural gas per year.
Oil & Gas
CALGARY — AltaGas Ltd. says it has stopped work on the Douglas Channel liquefied natural gas project due to low prices and an oversupplied market.
During a conference call Feb. 25 to discuss its financial results, AltaGas said the consortium behind the project failed to secure any meaningful offtake agreements and so it shelved the project.
AltaGas, along with its global partners in the project, had been aiming for the project near Kitimat, BC, to begin exporting LNG in 2018.
The project had recently been held up over a 25% excise duty being charged on its floating LNG facility.
AltaGas said that had been resolved and no duty would be charged, but with the unfavourable markets they couldn’t continue working on the project.
Earlier this year, Royal Dutch Shell said it was postponing an investment decision on its proposed LNG terminal in Kitimat until the end of the year.
The Douglas Channel project is one of the smallest of the more than 20 proposed LNG projects in Canada with the potential to export about 2.4 billion cubic metres of natural gas per year, compared with 33 billion cubic metres for Shell’s LNG Canada project.
© 2016 The Canadian Press