Tag Archives: Canadian LNG

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Trans Mountain, LNG Canada says the project continues despite the coronavirus pandemic | Instant News

Energy projects like Canadian LNG export terminal and Trans Mountain pipe expansion may face a short-term setback but corona virus The pandemic and falling oil prices should not threaten their long-term sustainability, economists say.

Andrew Leach, an energy economist at the University of Alberta, said long-term forecasts for natural gas and oil remained stable, even as some companies reduced workforce to meet safety protocols.

“I think the consensus among most people is that there is no big impact from what we see now outside the pandemic and recovery timeline,” he said.

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Global oil prices have recently fallen amid fears of oversupply as storage tanks are nearing capacity while refineries reduce output as economic activity slows during the pandemic. Low prices have forced some producers to cut production in Canadian oil packages.

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Werner Antweiler, an energy economist at the University of British Columbia, said the oil industry was facing a “double whammy” of falling global demand coupled with the Saudi-Russian price war. Recent agreement by OPEC and other countries to reduce production not far enough to balance supply with falling demand, he said.

But the pipeline faces a slightly different market power from the producers who fill it. There may be increased pressure on the pipeline because Canadian producers are trying to get oil to the market at the best price, while the specter of American protectionism could also increase pressure to bring Canadian oil to Asian refineries if the US is not available, Antweiler said.

Crash oil prices trigger green energy demand

Crash oil prices trigger green energy demand

Trans Mountain said in a statement that construction on the expansion project was proceeding well in its terminals and along the right side of the road in BC. and Alberta with COVID-19 security measures applied.

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Current oil prices have no direct impact on the project, the company said. Its customers have made commitments of 15 and 20 years for around 80 percent of capacity in the expanded pipeline. It will still be operational by the end of 2022, the statement said.

The existing Trans Mountain pipeline is operating at its maximum capacity for the first quarter of 2020, the company said.

Canadian LNG has reduced its workforce to manage the risk of COVID-19 spread, company affairs director Susannah Pierce said in a statement. But the company and the procurement and construction contractor, JGC Fluor JV, continues to reach “important construction milestones,” he said.

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Antweiler said liquefied natural gas has good long-term prospects due to the ongoing transition from coal to gas globally and increasing energy demand in Asia.

“These two things, they will continue once the economy returns to normal.”

In the case of Coastal GasLink, the 670 kilometer natural gas pipeline that will feed Canada’s LNG export terminal at B.C. the beach, a pandemic may never rival a disturbance earlier this year by its opponents, Leach said.

Construction in most ongoing projects can be vulnerable to disruption caused by outbreaks but seems to continue in the status quo. Leach cycled through the Trans Mountain construction zone in Edmonton on Thursday and apparently did not change, he said.

“It feels like walking at full speed,” he said.

Pipelines such as Trans Mountain, which is regulated by the Canadian Energy Regulator, are not commercial businesses in the sense that they do not risk full traders and have limits on tolls that can be charged. This also can largely provide additional costs to producers, Leach said.

“They cannot charge any costs to the market at any given point in time and as a result they also have some protection for their capital investment,” Leach said.

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The wildcard project is Keystone XL for several reasons, including that it does not have all of its permits and is not materially being built, he said.

“This is relatively early in the process and its cross-border nature, in length, all of these things make it more challenging in the market today. So it’s probably one of the projects most likely to be affected,” Leach said.

TC Energy, which owns the project, did not respond to requests for comment.

READ MORE: Canada is “very concerned” about OPEC’s decision amid a coronavirus outbreak, Trudeau said

While some people contemplate that falling oil prices signify the beginning of the end for oil, Leach and Antweiler don’t buy it.

Broad public policy changes or energy technology revolutions are needed to stimulate mass shifts away from oil dependence. If anything, Leach said physical abstinence could prevent drivers from switching to public transportation, for example.

Nenshi said Calgary would be the city most severely affected by the pandemic

Nenshi said Calgary would be the city most severely affected by the pandemic

“I want to see the oil industry fade faster than it should, but as an energy economist I still know we depend on oil for transportation,” Antweiler said.

He said he expects oil demand to remain stable for the next few years and it is up to countries in the world to curb demand through policies until cleaner options become more cost-effective.

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“There will be a potential decline in oil demand but it will not be as fast as expectations,” he said.

© 2020 The Canadian Press


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