Numerous media sources are saying that Royal Dutch Shell is in talks to acquire the BG Group.
Shell is developing the LNG Canada project in Kitimat, while BG had been developing an LNG proposal for Prince Rupert. BG announced last fall it was delaying further development of the Prince Rupert project due to uncertainty in the liquified natural gas market.
Buying BG would be Shell’s largest acquisition since the $60.3-billion (U.S.) merger of its Dutch and U.K. parent companies in 2005, according to data compiled by Bloomberg. It would unite the U.K.’s first- and third-largest natural gas producers….BG posted a record $5-billion loss in the fourth quarter, mainly due to writing down the value of its Australian assets as commodity prices fell.
BBC News quotes the Wall Street Journal as matching the report.
A Shell spokesman told the BBC: “We’re not making any comment.”
No-one from BG Group was immediately available to confirm or deny the WSJ’s report.
Last fall, when BG put the Prince Rupert project on hold, with a financial investment decision postponed until 2019, theFinancial Post, quoted BG executive chairman Andrew Gould as saying, “We’re not abandoning Prince Rupert, 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.”
At the time, analysts noted that unlike Shell, Chevron and Petronas, BG had no gas extraction assets in Canada. BG is a privatized spinoff of the once nationalized British Gas company in the UK.
There’s a dumb, dumb, really dumb idea that just won’t go away—that Enbridge could solve all its problems if only, if only, it would send the Northern Gateway Pipeline to Prince Rupert.
Enbridge long ago rejected the idea. Before Enbridge updated its website to make Gateway Facts, to make it slick and more attractive, the old website had an FAQ where Enbridge explained why it wasn’t going to Prince Rupert.
Did you consider running the pipeline to Prince Rupert where a major port already exists?
We considered Prince Rupert and Kitimat as possible locations. We carried out a feasibility study that took into account a number of considerations. The study found that the routes to Prince Rupert were too steep to safely run the pipeline, and that Kitimat was the best and safest option available.
Here in the northwest even the supporters of the Northern Gateway roll their eyes when they hear the old Prince Rupert story come up again and again – and it’s not just because these people support the Kitimat plans for Northern Gateway, it’s because those supporters (not to mention the opponents) have driven along the Skeena from Terrace to Prince Rupert.
There just isn’t any room for a pipeline. It’s a game of centimetres.
Alternatives to Kitimat?
Now the new premier of Alberta, Jim Prentice, who should know better if he’s going to lead that province, is hinting that Kitimat isn’t the only possible solution for the Northern Gateway.
Without specifying Prince Rupert, according to Gary Mason reporting in The Globe and Mail, Prentice was speculating about an alternative to Kitimat.
Asked whether he believes the Gateway terminus should be relocated to Prince Rupert or another destination, Mr. Prentice said, “Everything I’ve heard from the Haisla who live there is they don’t agree with the terminal being in Kitimat.” Is it possible to get First Nations approval if there is no support at the planned terminus site? “It’s pretty tough,” the Premier said.
Prince Rupert has a thriving local fishing industry that employs hundreds of people and is critically important to the local First Nations. He is convinced the community would not be willing to put that at risk.
“Overwhelmingly people in my community are much more comfortable with liquefied natural gas, with wood pellets, with coal, than any oil product,” he said.
The Prince Rupert Port Authority also rejected the idea
A spokesman for the Prince Rupert Port Authority said Wednesday there is currently no room for Enbridge to build at the port even if it wanted to. “We are fully subscribed,” Michael Gurney said. There are two large vacant lots within the port authority’s jurisdiction, but both are locked by other energy companies, earmarked for LNG projects.
So not only is there no room on the road to Prince Rupert, there is no room in Prince Rupert.
Let’s just consider for a moment that if Prince Rupert was the ideal location for the Northern Gateway terminal (which it is not), what would be needed to get the project going today.
The Northern Gateway Joint Review Panel would have be reconstituted or a new JRP created by the National Energy Board. That’s because the bitumen comes from Bruderheim, Alberta, crossing provincial boundaries and thus it’s in federal jurisdiction.
Even under the fast track rules imposed on the NEB by Stephen Harper’s Conservative government, new environmental and social impact studies would be required, starting from scratch. So add another five years of paperwork before a single shovel goes into the ground.
The pipeline would have to cross the traditional territory of First Nations that, so far, have not been part of the negotiations, mostly the Tsimshian First Nation as well as the Nisga’a First Nation which has a treaty establishing local rule over their territory.
In February 2012, the largest anti-Enbridge demonstration outside of the Lower Mainland took place in Prince Rupert, with the elders of the Tsimshian First Nation welcoming the elders and members of the Gitga’at First Nation, at Hartley Bay, which had organized the protest.
When I say there isn’t room for a pipeline along the Skeena, it also means that there isn’t any room for the pipeline corridor right-of-way. Enbridge, in its submissions to the Joint Review Panel, said it requires a 25 metre wide right of way for the pipeline corridor. (For the record that’s just over 82 feet).
Along that highway, as you will see, there’s barely enough room for the CN mainline and Highway 16 (also known as the Yellowhead Highway) and on a lot of places both the highway and the railway roadbed are built on fill along the side of a cliff.
Albertans’ desperate desire to see the Northern Gateway go to anywhere to what they call “tide water” keeps coming up like the proverbial bad penny. The latest came when Jim Prentice speculated about a new route for the Northern Gateway.
I knew I had an appointment coming up in Prince Rupert on Monday, September 29. So I decided that only way to prove to people sitting in Calgary, Edmonton and Fort McMurray playing with Google Maps that the pipeline to Prince Rupert was a really dumb idea was to shoot photographs to show just why the Northern Gateway will never go to Prince Rupert—at least along the Skeena.
As you drive out of Terrace, you pass two large swing gates (also called by some “Checkpoint Charlie” gates after the Cold War era crossing in Berlin.) At the first rest stop west of Terrace, there are another set of gates at the Exstew. There’s a third set of gates just outside Prince Rupert.
The swing gates are avalanche gates and, in the winter, Highway 16 can be shut down if an avalanche closes the highway or the danger from avalanche is too great to allow motorists to proceed. When you drive the highway from Terrace to Prince Rupert in the winter (the signs were covered up when I drove Monday) you are warned “Avalanche danger Next 13 kilometres. No stopping.”
The drive along the Skeena from just west of Exchamsiks River Provincial Park all the way to Tyee where the highway turns inland to reach northwest to Prince Rupert on Kaien Island is one of the most spectacular drives on this planet. The highway snakes along a narrow strip of land with steep mountain cliffs on one side and the vast river on the other.
The problem is that apart from locals and tourists, none of the “experts” whether journalist, think tanker, bureaucrat or politician have, apparently ever driven from Prince Rupert to Terrace.
When both Opposition Leader Tom Mulcair and Liberal Leader Justin Trudeau were in the northwest earlier this summer to “engage” with the local people, apart from short boat trips down Douglas Channel, they flew everywhere. Scheduling you know. Stephen Harper has never visited northwest BC and probably never intends to. His cabinet members fly in for photo ops and then are on the next plane out of town.
Of all the visiting journalists who have come to the northwest only a couple have bothered to drive around the region. Most fly-in fly-out. These days, most often budget-strapped reporters never leave their offices, interviewing the same usual suspects by phone on every story.
On Monday, I took most of the photographs on my way back from Prince Rupert to Terrace after my appointment, so the sequence is from west to east. There are also very few places along the river where you can safely stop. There are concrete barricades on both sides of the highway to prevent vehicles either going into the river or onto the narrow CN right-of-way.
There are, however, two rest stops and a number of small turnoffs on the highway, the turnoffs mainly intended for use by BC Highways, but which are also used by tourists, fishers and photographers.
The first image was taken at one of those highway turnoffs just east of Aberdeen Creek. This is what the highway and rail corridor are like all along the Skeena, the highway, bounded by concrete barricades, the CN rail line and then the towering mountains. Note where the telegraph and telephone lines are—further up the cliffside.
A closer view of the highway and rail corridor just east of Aberdeen Creek.
Here is the view of the Skeena River from the Aberdeen Creek turnoff. You can see to the east, a mountain and the narrow strip of fill land that supports the highway and the rail line.
You see the broad width of the mighty Skeena, the Misty River, as it is called by the Tsimshian First Nation and by everyone else who lives in the northwest and on the right side of the image, the highway and rail corridor built on fill.
Any room for a pipeline?
There’s another turnoff on the other side of the headland east of Aberdeen Creek, looking back the way we came.
The final small turnoff is just by the Kylex River. Again you can see how narrow the highway and rail corridor are.
A few kilometres further along—as I said the highway snakes and curves its way along the riverbank– you come to the Basalt Creek rest area. So this telephoto image shows a logging truck heading west, taken from Basalt Creek, looking back at the highway.
Again you can see both the highway and CN line are built on fill. Is there any room for a pipeline?
Any room for a 25 metre pipeline right-of-way?
Between Basalt Creek and Telegraph Point, a few kilometres to the east, again the highway and rail line hug the narrow strip between the river and mountains.
This shot, taken from Telegraph Point, in October 2013, shows a CN intermodal container train heading to Prince Rupert. The container trains and the coal trains usually have between 150 and 180 cars. If a winter avalanche took out a train, there would be environmental damage, but that damage would be insignificant from coal or containers compared to a train of railbit tankers carrying diluted bitumen.
At Telegraph Point, the second of the three rest stops between Prince Rupert and Terrace, again there is just a narrow strip between the mountain, the highway and the river.
Across the highway from the rest stop, you can again see the narrow corridor, the first shot looking west the rail line close to the cliff face, the second, east, with the waterfall, which you don’t see during the rest of the year, fed by the fall monsoon.
Two shots from the same location, Telegraph Point, taken in March, 2013, of a CN locomotive hauling empty coal cars back to the fields around Tumbler Ridge. (No waterfall in March)
Everyone has assumed that if Northern Gateway changed its route, the most likely choice given the configuration of the pipeline at the moment is to follow the Skeena.
If Enbridge wanted to try a northern route, similar to the one TransCanada contemplates for Petronas, Northern Gateway would again run into trouble.
It would require reopening or creating a new Joint Review Panel, many more years of environmental and social impact studies of the route, even under Stephen Harper’s fast track system. The TransCanada/Petronas pipeline would also cross the traditional territory of the Gitxsan First Nation and if Enbridge tried that the company would have to deal with the fact that it signed a controversial agreement with Elmer Derrick that was immediately repudiated by most members of the Gitxsan First Nation and eventually dropped by Enbridge.
So why does this idea of a pipeline to Prince Rupert keep coming up?
In most cases, the idea of the pipeline to Prince Rupert is always proposed by Albertans, not from any credible source in British Columbia, or the suggestions come from desk bound analysts in Toronto and Ottawa both in think tanks and in the newsrooms of dying newspapers who have never seen the Skeena River apart from a tiny handful who have looked at Google Street View
(Yes you can Google Street View Highway 16 along the Skeena, I recommend it if you can’t do the drive)
Perhaps the worst example of this failure of both analysis and journalism came in the Edmonton Journal on July 7,2014, when it published a piece by Bob Russell, entitled Opinion: Make Prince Rupert the terminus, which went over the same old inaccurate arguments.
The overland route currently proposed by Enbridge is fraught with environmental issues because it goes over coastal mountains and streams before entering Kitimat’s port. This port will also be the base of perhaps as many as four liquefied natural gas terminals, which will result in the channel always busy with LNG ships outbound and returning from many Asian ports.
There are existing rights of way for the major highway, the Yellowhead, and CN Rail line from Edmonton to the Port of Prince Rupert, so this eliminates the issue of transgressing First Nations lands. The technical issues of narrow passages can be overcome with engineering. In fact, the pipeline can be buried in the roadway at some restricted locations if absolutely necessary, but two different engineers have assured me that for the most part, the right of way should be able to handle the pipeline. A vital factor, of course, is to reduce the impact by eliminating the need for two pipelines.
The clue is how the Edmonton Journal describes Russell;
Bob Russell has an extensive background in planning and was a member of the Edmonton Metro Regional Planning Commission. He has flown the Douglas Channel, visited Kitimat and toured the Port of Prince Rupert.
This is so typical of the Albertan attitude toward northwest British Columbia, people fly in for a couple of days, make a quick observation, and fly out again and present themselves as experts on the region. (Some “experts” on Kitimat, very active on Twitter have apparently never left Calgary).
It obvious that the “two engineers” who assured him “the right-of-way could handle of pipeline” have no idea what they’re talking about. As the photos show there is barely enough room for a highway and a rail line much less a 25 metre wide pipeline corridor.
If the pipeline was to be built as Russell proposed, the only highway between Prince Rupert and the rest of Canada would have to be closed for years, there are no detours. All so a pipeline can be buried under the asphalt not in solid ground, but in the fill on the side of a riverbank in an avalanche zone?
Of course, closing a highway up here won’t inconvenience anyone in Edmonton or Calgary, will it?
Would CN be happy with years of disruption of their lucrative traffic to Prince Rupert with grain and coal outbound to Asia and all those containers coming in to feed Chinese products to the North American market? (you can be sure Walmart wouldn’t be happy about that, not to mention prairie farmers including those from Alberta)
There are existing rights of way for the major highway, the Yellowhead, and CN Rail line from Edmonton to the Port of Prince Rupert, so this eliminates the issue of transgressing First Nations lands.
Is also inaccurate.
I was told by First Nations leaders during the Idle No More demonstrations in the winter of 2013, that, a century ago, when the Grand Trunk built the railway along the Skeena , they did just that, built it without consulting the First Nations along the route, sometime digging up native cemeteries and sacred spots.
While apparently CN has worked in recent years to improve relations with the First Nations along the rail line, according to those leaders some issues of right-of-way remain to be resolved.
If there were any plans to build a diluted bitumen pipeline along that route, that would likely mean another court battle adding to those already before the Federal Court, a court battle that would cost Enbridge, CN, the federal government, environmental NGOs and the First Nations more millions in lawyers’ fees.
It’s doubtful if in the long gone (and perhaps mythical) days of “get it right” journalism that the Russell opinion piece would have passed the scrutiny of an old fashioned copy editor and fact checker.
In 2012, the Edmonton Journal (in a story no longer available on their website) also cited former Alberta Premier Peter Lougheed and former Bank of Canada governor David Dodge, as also favouring Prince Rupert.
Dodge, who was in Edmonton Tuesday to deliver a speech on the global economic outlook at MacEwan University, said Enbridge’s proposed Northern Gateway pipeline to Kitimat looks like even more of a long shot.
“I think the project to Kitimat looks, objectively, more risky. So why hasn’t much greater effort gone into looking at Prince Rupert and taking (bitumen) out that way? My guess is, the easiest place to get B.C. to buy into the project would be to go to Rupert.”
Dodge’s views echo those of former Alberta Premier Peter Lougheed, who also favours looking at an alternate pipeline route to Prince Rupert, where ocean-going supertankers can navigate more easily.
Back in 2012, I finished my piece for the Huffington Post by saying:
So why do people insist, despite the evidence, that the Northern Gateway go to Prince Rupert? It’s no longer an pipeline; it’s emotion and ideology. Ideology in that opposition to the Northern Gateway is seen by conservatives as heretical opposition to free enterprise itself. Emotion among those who see promoting the oil patch as an issue of “Alberta pride” and even Canadian patriotism.
For the promoters of the pipeline to Prince Rupert, ignoring the science of geology and the study of geography across all of northwestern B.C. is no different than repeatedly knocking your head against the Paleozoic metamorphic greenstone of the mountain cliffs along the Skeena. It only gives you a headache.
Things haven’t gotten much better in the past two years. In fact they’re getting worse as opposition to pipelines mounts.
It seems that in 2014 the Alberta and the federal government policy in promoting pipelines Northern Gateway, KinderMorgan’s TransMountain, Keystone XL, Line 9 Reversal and Energy East (slick PR and smiling representatives at open houses, politicians at strictly controlled photo ops) is to ignore facts on the ground and to refuse to deal with the concerns of local people from coast to coast.
There could, perhaps, be a more inclusive and truly science-based pipeline planning process that could see pipelines go on optimum routes but that isn’t happening.
The policy for the oil patch and its politician supporters when it comes to pipelines is facts and geology don’t really matter. So they put on ruby slippers, knock their heels together three times and send pipelines down a yellow brick road to an Emerald City (while telling the locals to ignore the man behind the curtain)
The BC Ministry of Jobs, Tourism and Skills Training today released a special report on the job prospects for the LNG industry and the policies needed on training, job mobility and use of temporary foreign workers.
Premier Christy Clark today accepted all recommendations in ‘The Premier’s Liquefied Natural Gas Working Group: Final Report’ as a road map to making sure British Columbia has the skilled labour force it needs to seize the opportunity of liquefied natural gas.
The report, produced by representatives of government, LNG proponents, organized labour, and the Haisla Nation, maps out 15 recommendations on planning, skills training, marketing and developing best practices within the LNG sector to attract a mobile workforce.
“To bring home the opportunity presented by LNG, we have to work together — government, industry, First Nations and labour,” said Premier Clark. “Everyone here today is working toward the same goal – making sure British Columbians benefit from this generational opportunity.”
Premier Clark called together the working group after her first meeting with representatives of organized labour in September 2013. At that historic meeting it was agreed that all parties would to work together to map out how they could work together to solve some of the complex challenges associated with the LNG opportunity.
“I want to thank the Premier for setting up the working group. I also want to thank the representatives of the Haisla Nation, industry, labour and government as it has been quite a process to come to agreement on the recommendations,” said Jim Sinclair, president of the BC Federation of Labour. “We were able to get beyond our differences by keeping our focus on what B.C. workers need to take advantage of the potential that lies in LNG. Now we have to ensure that the 15 recommendations are implemented. This investment in the workers of British Columbia will lead to good jobs. As we know, good jobs build a better B.C.”
The report includes one recommendation on developing a working group moving forward, four recommendations on skills training planning and implementation, two recommendations on marketing and promotions, three recommendations on apprenticeship trades and mentoring, two recommendations on a mobile workforce, one recommendation on timelines and two recommendations on the use of workers from other jurisdictions. The recommendations will be reflected in the 10-year skills training plan that will be released soon.
“Premier Clark recognized early the need for LNG workforce development in collaboration with industry, labour, and government,” said David Keane, vice president, policy and corporate affairs for BG Canada’s Prince Rupert LNG project. “Skills training is critical to ensure citizens of the province might realize the full economic benefits of LNG.”
From the report…..
Top 10 Construction- Related Jobs with the Greatest Demand
Spectra Energy Corp of Houston, Texas, today announced that the company has signed a Project Development Agreement with BG Group PLC, based in the United Kingdom, to jointly develop plans for a natural gas transportation system from northeast B.C. to serve BG Group’s potential liquefied natural gas (LNG) export facility in Prince Rupert.
A release from Spectra Energy and BG Groupsays each company will initially own a 50 per cent interest in the proposed transportation project. Spectra Energy will be responsible for construction and operation and BG Group has agreed to contract for all of the proposed capacity.
The approximately 850-kilometre, large diameter natural gas transportation system will begin in northeast B.C. and end at BG Group’s potential LNG export facility in Prince Rupert.
A fact sheet released by Spectra says the project would provide 50 to 60 permanent jobs on completion and about 4,000 jobs during construction.
The Spectra BG project will be the fourth using BC’s strategic position on the Great Circle Route to Asia to export liquified natural gas. TransCanada has signed a deal with Shell for a pipeline, Coastal GasLink, that would initially carry up to 1.7-billion cubic feet a day of gas to the Shell Canada project at Kitimat The Pacific Trails pipeline, could carry more than 1-billion cubic feet a day to the KM LNG partners ship where Apache, EOG and Encana are building a terminal at Bish Cove, south of Kitimat. The fourth project, BC LNG, would use either existing pipelines or share one of the proposed Kitimat pipelines to produce LNG for customers at a barge-based floating terminal at what is sometimes called North Cove, between the KM LNG project at Bish Cove and the proposed Enbridge Northern Gateway project which would be close to the Rio Tinto Alcan smelter.
The Spectra release says the new transportation system will be capable of transporting up to 4.2 billion cubic feet per day of natural gas. The project will connect with the Spectra Energy facility at Fort St. John, the centre of the still growing shale gas production and exploration in the northeastern BC.
Greg Ebel, president and chief executive officer, Spectra Energy says in the release:
We are excited to be partnering with BG Group, a recognized world leader in natural gas and more specifically, LNG. This project offers B.C. a unique opportunity to access new markets, strengthen its energy infrastructure, engage stakeholders in economic growth and job creation, and ultimately secure the province’s position as a competitive energy leader.
Furthermore, today’s announcement initiates our next wave of investment opportunity in B.C. We are ideally positioned to create further value for our investors by leveraging surplus B.C. natural gas supplies and facilitating its export to high-demand markets in Asia. This, in turn, will provide multiple opportunities for further investment in our gathering and processing facilities in the province.
Doug Bloom president of Spectra Energy Transmission West adds in the release:
For more than half a century, Spectra Energy has been a part of communities in B.C. This project will build on our expertise and track record of delivering natural gas responsibly, listening to the needs of Aboriginal and local communities, and protecting the environment, as we help deliver on B.C.’s energy potential.
Working together with affected stakeholders and based on preliminary assessments of environmental, historical, cultural and constructability factors, early conceptual routes have been developed. Spectra Energy and BG Group will continue engaging with interested and affected stakeholders, including Aboriginal and local communities, environmental organizations and regulatory agencies, to further refine the project route.
As is now common with proposed energy projects for northwestern British Colulmbia, Spectra has set up a website for consultations Energy for BC.
Spectra says: “The new outreach initiative is designed to engage with stakeholders on the jobs, revenues and environmental benefits that natural gas can create in British Columbia.”
Spectra also makes the usual commitment to “spend the next several years closely conferring with stakeholders and working through the permitting process for the proposed transportation system.”
The race to ship liquified natural gas to Asia is getting hotter with three new powerhouses joining the scramble for west coast export terminals.
The Prince Rupert Port Authority announced Tuesday, Feb. 7, that it is working with an energy powerhouse BG Group, on a feasibiity study for an LNG terminal at Ridley Island.
At the same time The Globe and Mail reports that there are rumours that Exxon Mobile is “examining LNG options” in the northwest. The paper also quotes sources as saying the Japanese firm Itochu is looking to export gas via Kitsault, where there is an abandoned molybdenum mine, town and port.
British Gas was once the retail domestic supplier of natural gas to the UK market. The company split in two in 1997, with BG Group becoming an international exploration and energy production company.
Itochu is a 150-year old Japanese company which began as Chibou Itoh’s one man linen trading company, later adding drapery shops and over more than a century expanding operations to become a major international conglomerate with strong interests in the energy sector. According to the company website, Itochu is also a player in the solar energy and bio-ethanol fields.
“The Prince Rupert Port Authority has engaged with the BG Group to consider Prince Rupert for a potential LNG export facility. The BG Group is number two in the world in LNG, next to Shell and they are number two depending on what measurements you look at, so they are already a big player in that industry” according to Shaun Stevenson, vice-president of Marketing and Business Development for the Prince Rupert Port Authority.
“We have an agreement signed to provide them a site and to secure that site to examine the suitability of it and the feasibility of the facility…We have given them a period of time to conduct the feasibility and suitability study, and if it is determined to be viable from the preliminary work that is done then we will look at further development,” he said.
David Byford, spokesman for the BG Group in Houston, confirmed the deal has been signed but cautioned “Prince Rupert is one of the areas we are looking at, and we are in the very early feasibility study stage.”
“The west coast of Canada is certainly advantageous for LNG export, and there is a lot of natural gas in BC as well.”
Prince Rupert port spokesperson Michael Gurney says it will be 12 to 24 months before there’s a clear commitment on the project.
A spokesman with Itochu declined comment when contacted by The Globe and Mail. Kitsault, near Alice Arm, in the traditional territory of the Nisga’a nation, was the site of a short lived molybedenum venture by the Phelps Dodge company. After the mine was abandoned, the town was bought by Indo-American businessman Krishnan Suthanthiran and is now promoted as a nature and wilderness retreat, called Heaven on Earth.
The Globe and Mail also quotes sources as saying that Exxon Mobil Corp., which has substantial natural gas reserves in northeastern B.C., has also been examining LNG options. Pius Rolheiser, a spokesman with Canada’s Imperial Oil Ltd., which is majority-owned by Exxon, said in a statement to the Globe and Mail: “Imperial continuously reviews a variety of opportunities to increase value to our shareholders. As a matter of practice, and for competitive reasons, we do not discuss specific strategies.”