Seeking Alpha

Canada warned of cost escalation for LNG projects

Severe cost inflation could well show up on Canada’s west coast, industry participants say, should Chevron (CVX), Royal Dutch Shell (RDS.A, RDS.B) and Malaysia’s Petronas launch multibillion-dollar liquid natural gas construction programs at the same time.

The British Columbia government is counting on natural gas exports to provide it with billions of dollars over several decades, but new entrants are skeptical that B.C. can escape Australia’s fate, where a building frenzy saw costs for CVX’s Gorgon LNG plant blow past $50B.

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Comments (3)
  • rjj1960
    , contributor
    Comments (1372) | Send Message
    Go non union.
    18 Sep 2013, 12:50 PM Reply Like
  • sbecker75
    , contributor
    Comments (4) | Send Message
    Blood sucking opportunists going for too much may loose it all. Stupid.
    18 Sep 2013, 03:11 PM Reply Like
  • OffshoreD
    , contributor
    Comment (1) | Send Message
    A key difference is that several of the LNG development options for western Canada involve floating LNG facilities that would be built in Korea or China and towed into position in sheltered nearshore locations. One of the issues with high costs in the Australian LNG developments was the scarcity of labour in remote locations. Building these facilities in experienced overseas shipyards would help eliminate the cost pressures of scarce labour in western Canada. The challenge remains of sourcing labour for the tie-ins and associated gas pipelines, but hopefully this will be a more manageable challenge.
    18 Sep 2013, 09:35 PM Reply Like
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