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52 www.resourceworld.com o c t o b e r / n o v e m b e r 2 0 1 4 OIL & g a s T hings are heating up in the anticipation of British Columbia's expected natural gas boom, as progress is being made towards the expor- tation of liquefied natural gas (LNG) from Canada's west coast. With thousands of jobs, billions of investment dollars, and trillions of cubic feet of gas at stake, how things proceed from this point on is incredibly important. The idea is simple: Canadian natural gas prices will continue to be far lower than those realized on the open market, so we should be hurriedly developing our export options. Canadian natural gas producers, and the provincial and federal governments involved continue to press onward towards developing infrastructure. The economic difference is enormous, as producers would see a price jump for Canadian nat- ural gas from the current sub-$4 per mcf prices domestically, to upwards of $14 per mcf realized in places like Asia. Therefore, the introduction of LNG capabilities in theory would see a flood of drilling activ- ity into BC's shale gas resources, which have an estimated 107 tcf conventionally, and even more unconventionally. The federal government, through its National Energy Board, has already issued seven large LNG export licenses within the last year in order to finally set off to sea with ships carrying liquid gas to international markets. Should all seven come to fruition, the combined export demand would be an enormous 14.6 billion cubic feet per day (bcf/d). To put that number in perspective, that's more than what is currently coming out of the country today at 12.7 bcf/d. In order to meet the market demand, gas production in BC will need to ramp up. That means more jobs, and more invest- ment into the sector as a whole, as it has been estimated that nearly 50,000 new wells will need to be drilled in the next 27 years (approximately double the roughly 25,000 wells drilled in BC since the 50s). At present, there are 17 proposed LNG export terminal projects in the works, (16 of which are located in British Columbia). However, that number may fall in the near future, if reactions to the BC government's upcoming LNG tax legislation become too negative. This is a real concern, as the com- pany in charge of the project, seen by most as the most likely to proceed first, recently aired its discontent through the financial media. Malaysian, state-owned, oil giant Petronas has regularly been seen as the most sure-thing among the crowd of potential LNG port builders. However, recent remarks from the company's Chief Executive Shamsul Abbas put the BC gov- ernment on notice that this will not be a one-way negotiation. The $10 billion Pacific NorthWest LNG Project has been seen as the jewel of the upcoming LNG revolution. But the lat- est remarks from the Abbas regarding the company's apprehension immediately put BC Premier, Christy Clark, and her govern- ment on the defensive. "Canada has to buck up real fast to be a credible global LNG player if it wants to be taken seriously by potential investors," Abbas told the Financial Times. It didn't stop there. An official state- ment from the company to Reuters stated: "Petronas needs to be assured that the project is economically viable and satisfies its investment criteria before going ahead Rich Coleman, bC's Minister of natural gas development. Photo courtesy Province of british Columbia. British columbia government promoting lnG projects by Joel Chury