LNG Projects Facing a Dead End
The LNG boom has encouraged a number of companies in the gas sector to develop new projects and benefit from fresh opportunities. A lot of them are on the road to being operational and others are on the brink of a final investment decision. However, there are LNG projects that are just not meant to see the light of day anytime soon or even at all.
Recently, Steelhead LNG announced that the work on the Kwispaa LNG project has stopped. The LNG export project was being developed in partnership with the Huu-ay-aht First Nations for the west coast of Vancouver Island and was supposed to export 24 million tons of LNG per year.
The major factor that caused further development to halt was investor uncertainty. The project was estimated to cost around €15 billion, and since Steelhead LNG is funded by investors only, this loss means the work cannot be continued. Although there is still hope Kwispaa LNG could be revived in the future, for now, there’s no way forward for this project.
The Shannon LNG terminal in County Kerry, Ireland has been postponed indefinitely by the High Court in February. The €500 million gas project now has to be reviewed by the European Court of Justice to decide whether it needs to be assessed under the EU’s Habitats Directive. It is necessary because a large jetty is planned for the terminal that could negatively affect the EU-designated special conservation and wild bird protection area. The decision process could take up to two years, and until then, developers are advised that no construction should begin.
It is not the first time the Shannon LNG project has stalled. Even though it was granted a planning permission in 2008, the project didn’t take off due to environmental and economic concerns and was thought to have been abandoned in 2014. However, once the planning permission expired in 2018, Shannon LNG sought to extend it for another five years, triggering the current situation. Until an answer from the EU is received, it’s hard to tell whether the latest foray to renew the project will be deemed successful or if it’ll be the final nail in the coffin.
More than one project is at risk in Queensland, Australia because one-third of its LNG industry might face closure by 2025, reports EnergyQuest. This is because the three LNG projects in the area, comprising six trains, rely on coal seam gas reserves as feedstock, and it is quickly running out. If the prediction proves true, Queensland LNG capacity could shrink to four production trains.
The situation, however, is not that dire as, currently, the LNG plants fail to reach their full capacity, operating at an average 82% capacity in 2018, according to EnergyQuest. It is believed that with the end of two LNG production trains, Queensland will not suffer overmuch and will still stay a leading LNG exporter. So even with important resources on the brink of running out, it might not be a complete dead end for Queensland LNG.
Could the other LNG projects be as lucky? Ask LNG industry professionals, top experts, and key executives at the 4th International LNG Summit in Oslo, Norway on June 18th. Registration is already open on the event website at www.lngsummit.org.