(Adds comment from British Columbia gas minister)
Oct 29 (Reuters) - British oil and gas producer BG Group Plc will delay until the next decade a proposed liquefied natural gas export terminal on Canada’s Pacific coast, the Wall Street Journal reported, quoting the head of the company’s Canadian unit.
"We'd always said (construction would begin) as early as 2016, but we now recognize it'll likely be later, with commercial operations likely beginning early in the next decade," BG Canada President Madeline Whitaker said in an interview with the Journal. (on.wsj.com/1p0jUuM)
Kim Blomley, a spokesman for BG Group, said he could not immediately confirm if the project had slipped into the next decade, but he noted comments by interim Executive Chairman Andrew Gould during a post-earnings conference call on Tuesday.
“We’re pausing on Prince Rupert to see how the market evolves, particularly in function of total supply that will come out of the U.S.,” Gould said during the call. “We will continue to work on the project but not at the same rhythm as perhaps we were working in 2014.”
Canada’s National Energy Board granted LNG export permits to four planned projects on the Pacific coast in December last year, including BG Group’s Prince Rupert project.
Whitaker said the delay resulted from shifting market conditions, including a flood of LNG expected to hit global markets from places such as the United States, where BG has agreements to market gas from two LNG facilities.
Rich Coleman, British Columbia’s Minister of Natural Gas Development, downplayed concerns that other project owners might delay their ventures for similar reasons.
“We haven’t seen any slowdown in the progress of any of the PDAs (project development agreements) that we have been working on with any of these companies, so at this stage I am still pretty confident,” Coleman told reporters in British Columbia’s capital, Victoria.
Government officials have been invited to a meeting on Nov. 11 with executives from Malaysian state-owned energy company Petronas, which plans to build an $11 billion LNG plant on British Columbia’s coast, he said. Petronas said earlier this month that it could delay its proposed plant by as many as 15 years unless it can reach a favorable tax deal by the end of October.
“I am pretty confident that we wouldn’t be asked to go to Malaysia to sit down with the board and the CEO on a one-to-one basis if we weren’t getting somewhere in our project development agreements, which we are,” Coleman said.
BG Group, Britain’s third-largest energy company, reported a worse-than-expected 26 percent fall in third-quarter operating profit, mainly due to a sharp decline in production in Egypt and a steep drop in oil prices. [ID;nL5N0SN10P] (Reporting By Manya Venkatesh in Bangalore. Additional reporting by Nicole Mordant in Vancouver; Editing by Alan Crosby)
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