Sign Up for FREE Daily Energy News
CDN NEWS  |   US NEWS  | TIMELY. FOCUSED. REVELANT. FREE
BREAKING NEWS:

Hazloc Heaters
Hazloc Heaters

Buffett Drops $3 Billion LNG Investment in Quebec, Reports Say


By Sandrine Rastello

(Bloomberg) Warren Buffett’s Berkshire Hathaway Inc. is pulling out of a gas export project in Quebec after weeks of rail blockades and an oversupplied market eroded the facility’s appeal, according to local reports.The investment giant was going to provide C$4 billion ($3 billion) for GNL Quebec’s proposed liquefied natural gas plant 290 miles northeast of Montreal, according to Michel Potvin, a city councilor who heads the promotion agency in Saguenay, where the project is based.

La Presse and state broadcaster Radio-Canada first reported that Berkshire was walking away from the project. The Omaha, Nebraska-based holding company declined to comment. A GNL Quebec spokeswoman declined to confirm Berkshire’s role in the project, but she said that after months-long talks, a “major” investor was discouraged by the climate of protests and political hurdles facing energy projects in Canada.

“Of course that’s significant news for us,” said Fortin. “What impact will it have? It’s hard to confirm at this stage and hard to say if it will change our timeline.” Under current assumptions, construction would begin late 2021, and production in 2025, she said.

For more on the political tension over the rail protests, click here

It’s the second time in less than two weeks that political uncertainty in energy-rich Canada is blamed for killing a major investment in the sector. Teck Resources Ltd. last month pulled its application for a controversial new oil-sands mine in Alberta, accusing the country of not having a clear framework to reconcile resource development and climate change.

But the global market for oil and gas isn’t looking attractive for investments either, with the coronavirus outbreak just dealing the latest blow to the outlook for demand. Several LNG shipments are being canceled worldwide, and U.S. developers are being hammered in the equity and bond markets. The glut is poised to worsen, with BloombergNEF estimating that 71 million tons of new annual production was sanctioned last year, with all of it scheduled to come online between 2023 and 2026.

GNL Quebec currently has about 15 financial backers and still need to go through hearings and certifications processes, Fortin said.

The C$9 billion project — which aims to bring gas from Alberta to freeze it into a liquid at Saguenay before shipping it overseas — would create as many as 300 jobs locally, she said.

While Saguenay’s cold temperatures and deep water port makes it a strong candidate for the project, Canada’s handling of the rail crisis sent investors the wrong signal, city councilor Potvin said.

“Entrepreneurs want positive signs from governments. The rail crisis didn’t show a lot of positivity,” he said. “We’re convinced that if this project doesn’t happen in Saguenay, it will happen in Massachusetts, in Texas or wherever.”



Share This:



More News Articles


New SHOWCASE Directory Companies

 

Hazloc Heaters
Scovan Engineering
Dycat Solutions
Bedrock Automation