On Feb. 3, 2012, government released British Columbia’s Natural Gas Strategy: Fuelling B.C.’s Economy for the Next Decade and Beyond concurrently with the government’s Liquefied Natural Gas (LNG) Strategy.
A primary goal: to attract investments necessary for capital planning, market diversification and the development of a LNG industry.
Since early 2012, the Province estimates more than $20 billion has been invested by industry to further B.C.’s LNG opportunity.
This estimate is built using the financial transactions reported by individual companies, as well as capital expenditures reported in natural gas exploration and production by the Canadian Association of Petroleum Producers (CAPP).
Significant interest investments include:
- A $2.9-billion investment made by Mitsubishi Corporation for a 40% interest in an underdeveloped area of the Montney Formation. This investment was part of a deal with EnCana Corporation, known as the Cutback Ridge Partnership. Mitsubishi is a major c-venture partner in LNG Canada.
- A joint-venture $1 billion investment deal with PetroChina purchasing a 20% interest in Shell Canada’s Grounbirch assets in the Montney Formation – British Columbia’s premier natural gas resource play. PetroChina is also a joint-venture partner in the LNG Canada proposal.
- A joint venture agreement between Nexen Inc. and INPEX Corporation and an investment of $1.14 billion in multiple natural gas projects in northeast British Columbia, including the Horn River Basin, the Cordova Embayment, and the Liard Basin. With the strategic development deal in place, and assets for future exploration, plans for LNG started and the companies are now part of the Aurora LNG proposal.
- An investment by Chevron totalling $1.3 billion to acquire operating interest in Kitimat LNG, the Pacific Trail pipeline, and natural gas rights in both the Horn River Basin and the Liard Basin. The deal resulted with Chevron Canada owning a 50% stake in the Kitimat LNG proposal.
- An acquisition by Woodside Petroleum Ltd. to acquire 50% ownership of Kitimat LNG and the assets linked to the proposal. The purchase from the Apache Corporation was for $1.07 billion.
- A transaction by Progress Energy to purchase $1.5 billion to acquire ownership of assets owned by Talisman Energy, including natural gas interest in the Montney Formation. Progress Energy is the operator conducting upstream activities for the Pacific NorthWest LNG proposal.
- A $54 million investment by JAPEX to acquire a 10% interest in the North Montney resource area. JAPEX is one of the proponents linked to Pacific NorthWest LNG.
- The expansion of FortisBC’s Tilbury LNG facility in Delta, for domestic needs and potential export, has already provided $60 million in contract work to businesses throughout British Columbia.
CAPP reports out on industry investments – represented by capital expenditures in exploration and production – on an annual basis, and the Province uses these reports to pinpoint an annual amount invested in LNG-related activities. This includes:
- $3 billion in 2012
Total capital investments in upstream = $5.2 billion / 57% of $5.2 billion = $3 billion estimated for LNG
- $3.4 billion in 2013
Total capital investments in upstream = $5.7 billion / 60% of $5.7 billion = $3.4 billion estimated for LNG
- $3.2 billion in 2014
Total capital investments in upstream = $7.3 billion / 44% of $7.3 billion = $3.2 billion estimated for LNG
- $2.4 billion in 2015
Total capital investments in upstream = $5.0 billion / 48% of $5.0 billion = $2.4 billion estimated for LNG
The total amount of industry investment during the 2016 calendar year has yet to be announced.