Fort St John, BC Economy Poised For Recovery

 

 

 

Northeast BC Investor Update: January 2018

 

 

B.C.’s NDP premier turns LNG cheerleader in Asia trip

To the surprise of many, British Columbia NDP Premier John Horgan could emerge as the saviour of Western Canada’s troubled liquefied natural gas (LNG) industry.

Horgan is leaving Saturday for a 10-day mission to Asia and will have meetings in China, Korea and Japan with backers of two proposed LNG projects: LNG Canada, sited in Kitimat and led by Royal Dutch Shell PLC with partners PetroChina, Korea Gas Corp. and Mitsubishi Corp. of Japan; and Woodfibre LNG, located north of Vancouver in Squamish, and owned by the RGE group of companies based in Singapore.

Meanwhile, Kitimat LNG, a joint venture between Chevron Corp. and Australia’s Woodside Petroleum Ltd., is re-emerging as a player with Horgan’s support and is working to improve the competitiveness of its proposed plant.

“I think we have a real opportunity of perhaps landing one or two LNG facilities here in British Columbia,” Horgan told Stewart Muir, executive director of Resource Works Society.

[read the full article here]

 

 

Northeast B.C. unemployment drops more than half to 4.6% in 2017

Unemployment in Northeast B.C. plummeted by nearly six percentage points in 2017.

The region finished the year with 4.6 per cent unemployment in December, down from 10.5 per cent at the end of 2016 and the start of the year, according to Statistic Canada’s Labour Force Survey released Jan. 5.

Unemployment dropped steadily throughout 2017 with an uptick in the oil and gas sector that brought major projects including Pembina Pipeline’s Northeast B.C. expansion project, AltaGas’s Townsend expansion and North Pine liquids facility, and the Tower and Sunrise natural gas plants, among others.

Spending on petroleum and natural gas drilling and exploration rights also hit $173.25 million in 2017 after a dismal record low of $15.1 million in 2016.

[read the full article here]

 

 

BC Hydro poised to sign contract to build generating station, spillway for Site C

BC Hydro is poised to sign a billion-dollar contract to build the generating station and spillway for the Site C dam.

The Crown utility announced Dec. 21 it has selected the AFDE Partnership as its preferred proponent to carry out the work.

The partnership includes Aecon Constructors, Flatiron Constructors Canada, Dragados Canada, and EBC Inc., and will be responsible for building Site C’s powerhouse, penstocks, spillways, and power intakes.

BC Hydro says it’s finalizing contract terms with the partnership, which the utility’s board of directors still needs to approve. The deal is expected to be signed in early 2018, with the partnership mobilizing to the site in the spring, BC Hydro says.

An uncensored report accidentally made public as part of that review showed BC Hydro budgeted the dam’s generating station and main spillway at $1.25 billion.

[read the full article here]

 

Encana to focus 2018 spending in Montney

After coming out of 2017 ahead of its production growth targets, Encana said this week it would focus its 2018 capital spending on its core areas – specifically the Permian Basin in Texas and the Montney play that straddles Alberta and B.C.

Encana said it plans to spend “similar” to its 2017 $1.8-billion capital program this year, with “modest allocation adjustments to optimize delivery.” Approximately 70 percent of spending will be directed to its Permian and Montney assets.

Encana said it more than doubled liquids production in the Montney between 2016 and 2017, “driven by a focus on condensate rich wells and the early start-up of the Tower, Saturn and Sunrise processing plants.”

In 2018, the company said it expects to grow its liquids production as it fills capacity at the new plants and completes two additional liquids hubs in the second half of the year, further reducing its exposure to low regional natural gas pricing.

[read the full article here]

 

Pembina Pipelines approves LPG export terminal in Prince Rupert

The board of directors for the Pembina Pipeline Corporation has approved the development of its proposed liquefied petroleum gas (LPG) export terminal.

The Prince Rupert Terminal will be located on Watson Island, British Columbia on lands leased from a wholly-owned subsidiary of the City of Prince Rupert. Through site assessments and engagement with key stakeholders, the company has confirmed Watson Island as the ideal location for the project to be developed and has executed definitive commercial agreements with the city.

The Prince Rupert Terminal is expected to have a permitted capacity of approximately 25,000 bbls/d of LPG and is expected to be in service mid-2020, subject to Pembina receiving necessary regulatory and environmental approvals.

In announcing its overall budget, Pembina said that its board of directors has approved approximately $400 million of new capital projects, as well as a capital program of approximately $1.3 billion for 2018.

[read the full article here]

 

TransCanada keeps LNG pipeline to northwest B.C. alive

TransCanada continues to keep alive its $6-billion Prince Rupert Gas Transmission Project to transport natural gas from northeast B.C. by pipeline to the coast despite uncertain market and economic conditions.

Just two weeks ago, the mega-project received approval from the B.C. Environmental Assessment Office for an amendment to its project certificate for two additional main construction camps, and a standby compressor unit at each of its eight proposed compressor stations.

The proposed 900-kilometre pipeline was meant to feed the Petronas-led $11.4-billion Pacific NorthWest LNG project on Lelu Island near Prince Rupert that was cancelled five months ago.

“TransCanada continues to evaluate alternatives for the PRGT project and are completing matter-of-course permitting work that was underway prior to the Pacific Northwest project being cancelled in mid-2017,” TransCanada spokeswoman Doris Kaufman Woodcock said in a written statement Thursday.

[read the full article here]

 

“The past as it becomes a present”

– Trevor Bolin #1 Realtor in Fort St. John with RE/MAX

“I have been known over the past almost two decades in Real Estate to give my opinions more than the amount of years I have been a Realtor. Some people I am sure have used them to buy or sell depepding on the position they were in, some have not. All these years later I can recall the stories of people waiting to buy or waiting to sell based on main stream media.

Attached to this blog is an interesting graph, now I could tell you this is Fort St John’s housing graph since 1950 based on sales and activity and you would google it to find out it is very close. I could tell you this is Fort St John’s construction graph, or new housing and ultimately it would be very close. The fact of the matter, this is world oil prices since the early 1950’s. The four red dots you see above are all the really matters for today’s topic.

 

The red dots in the graph play an important role in looking at this whether it was the housing sales graph, construction graph, sales graph or what it is, the oil graph. The dot farthest to the right is the price of oil today, hovering at the mid 60’s and up about 22% over last year. The dot to the left of that was the end of 2009 when prices started to climb back from the depths of 2008. Continuing left was 2004 again recovering and heading to its ultimate highest peak near 160 a barrel. The farthest dot to the left was 1978 when of course things started to boom and for Fort St John became one of the busiest markets in the west.

So okay, thats great .. dots on graph, what could it mean if anything. The dots aren’t part of the graph, truth be known, the graph without the dots aren’t that important either. What matters for us in looking into our market, is the graph and the dots together. Each of those dots that I mentioned above, and that are shown above represent the signs of changing times.

Each of the dots on the upward climb, have a corresponding downward cross path. the first one 1977, crosses paths with 1985. The second from the left with a climb of 2004, crosses paths with 2008. The third one 2009, again levels out with 2015. Each of these represents a stable climb combined with the downward slide for an additional year, or years like this last case.

So where do these years leave us with right now? As you can the see the dot to the farthest right giving us where we stand today with a healthy recovery of world wide oil prices, translated into the climb of both our market as well as our neighbors to the east. This is great news, we not only have an idea of where we are sitting, but we can see from each of the graphs changes, where we are heading. Using the same theory we have used to plot the past, lets plot the future together. Collectively these average out to 2018 being a great build year with a limited amount of inventory lasting until 2023/2024 when this graph could at the time take another swing into a downward position for both the industry, our market and and the economy.

So again as I said in January of 2016 (now two years ago) when I made the following graph below, I am not a fortune teller or a medium … just simply someone who loves seeing Fort St John flourish and being the guy you can rely on for accurate, factual information.”


Fort St. John Market Report - February 2017

Woodfibre-LNG-offers-few-jobs-vs.-big-impacts-Retired-KPMG-partnerApplication for a 40-Year Export Licence For Woodfibre LNG Project

The licence would allow the export of approximately 2.1 million tonnes of LNG per year for 40 years from the Woodfibre LNG Project READ MORE

 

 

townsend-gas-plant.jpg__0x500_q95_autocrop_crop-smart_subsampling-2_upscale

2017 could be pivotal year for energy sector

Hundreds of millions of dollars are expected to start flowing into B.C. in 2017 in the form of energy infrastructure investments, from the Trans Mountain pipeline expansion to the Woodfibre LNG plant in Squamish to natural gas wells, pipelines and processing plants in northeastern B.C. READ MORE

oilgas_montney-rig-worker_source_encana.png__960x536_q85_autocrop_crop-scale_subsampling-2_upscaleB.C. oil & gas land sale raises more in one day than last two years combined.

Eight drilling licences brought in $39.6 million, including a record-setting $35 million parcel east of Dawson Creek. READ MORE

DSite Cecember saw a decent sized jump in the number of people working at the 1,100 megawatt Site C Dam

BC Hydro’s Site C Dam is Canada’s largest infrastructure project. In December, there were a total of 1,916 workers on the 1,100 megawatt dam. The number of Construction and Non-Construction Contractors jumped by 149 to a total of 1,531, 1,250 or 82 percent of whom were B.C. residents. BC Hydro has created a very cool 2-minute drone video capturing the progress of the project to date, to watch the video click here

AltaGasAltaGas will build its $500-million Propane Export Facility

AltaGas will proceed with building its Ridley Island Propane Export Terminal, a $500 million facility that would export 1.2 million tonnes of propane a year to Japan and other Asian markets.“Together with our northeast B.C. infrastructure, once the Ridley Export Terminal is built and operating, we will give producers new access to premium Asian markets for their propane.” [read full article here]

AlMontneytaGas to build new Montney facilities for $180-million

AltaGas Ltd. to build a 120 million cubic feet per day deep-cut natural gas processing facility, a natural gas liquids separation train, and rail terminal this year.The deep-cut processing facility is expected to cost approximately $100 – $110 million while the separation train and rail terminal are expected to cost an additional $60 – $70 million. They expect the facilities to be online in early 2019. [read full article here]


BC working with feds on Pacific NorthWest LNG delay

Provincial officials are in Ottawa today to work with their federal counterparts on overcoming the latest delay for Pacific NorthWest LNG (PNW), B.C.’s natural gas minister says.

In a statement, Rich Coleman said senior officials from the province are in the capital to “reach a positive final outcome that helps our economy, protects the environment, and respects First Nations.”

“I’m confident that any remaining questions can be answered completely and quickly. They have to be. Jobs for British Columbians should not be held by unnecessary delays,” Coleman said.

“After all, this just isn’t any project. At $36-billion and 18,600 jobs, PNW LNG would be the largest private sector investment ever in Canadian history.”

“The positive impacts of PNW would be felt across almost every community in BC and across [full article here] 


Jordan Cove LNG lands sales agreement for gas

Jordan Cove LNG, a natural gas export facility proposed on the Oregon coast, has signed a 20-year sales agreement with world’s largest liquefied natural gas buyer.

The deal appears to put the project, which could take gas from the B.C. Montney formation, back on track after running into a roadblock with U.S. regulators.

JERA Co. Inc, a joint venture of the Tokyo Electric Power Company and Chubu Electric Power Co., Inc., signed on to buy 25 per cent of the project’s proposed 6 million tonnes per year output in a deal announced Tuesday.

The company is owned by Veresen Inc., a major midstream natural gas player with assets in the Dawson Creek area. [read full article]


Site C Dam civil construction begins in May

Site C Dam is 8 months into the 10-year Site C Dam project. While the physical construction of the Dam doesn’t begin until May, there has been lots of progress made to date.

This is the largest infrastructure project happening across Canada, located 7 km from Fort St. John.

Over the course of the project 33,000 jobs are expected to be created.


Billion-dollar gas plant approved for Dawson Creek area

A partnership involving Veresen Inc. and Encana Corp. that has already committed $1.5 billion to two new gas processing plants in the Dawson Creek area has announced plans to spend nearly $1 billion more on a third gas processing plant.

Veresen is already building two new gas plants in the Dawson Creek area – the Sunrise and Tower plants – with a combined capital cost of $1.5 billion.

Last year, Veresen acquired natural gas gathering and compression assets from Encana and the Cutbank Ridge Partnership.

As part of that deal, Veresen committed to $5 billion worth of investments to build out additional assets for Encana and the Cutbank Ridge Partnership. Under the agreement, Veresen is funding 55% to 60% of the three new gas plants.

The investments underscore the attraction of the Montney formation in Northeastern B.C. [full article here] 


Squamish Woodfibre LNG project gets federal environmental approval

The federal government gave its stamp of approval to the $1.6-billion Woodfibre liquefied natural gas project Friday.

Exporting and processing 2.1 million tonnes of LNG each year from the former pulp mill site southwest of Squamish is unlikely to hurt the environment, according to a release from Catherine McKenna, Minister of Environment and Climate Change.

Winning environmental approval from the federal government was the last major hurdle to clear for the polarizing project, which can start launching 40 double-hulled LNG-bearing tankers to Asia each year, beginning as early as 2017.

The project should create about 650 construction jobs during the building phase and more than 100 jobs once the plant is operational. [full article here]


The Future of British Columbia LNG

Yesterday much of the Chinese capital shut down after Beijing’s city government issued its first red alert for pollution. China, which meets 66% of its energy through coal, has committed to reducing that to 62% by 2020. [source] Despite that commitment, it continues to build new coal fired power plants at an alarming rate.

Coal is the dirtiest of all fossil fuels, it creates more pollution than oil, natural gas and gasoline when burned.

Liquid natural gas (LNG) is the cleanest fossil fuel, and Canada has an abundance of natural gas.

“That’s another significant piece that people miss on this whole LNG story in B.C – that we’re actually helping large economics that are continuing to grow to create new transition fuels to get out of older fuels into cleaner-burning fuels,” said Greg D’Avignon, CEO of the Business Council of BC.

Northeastern BC is home to the Montney Formation and Horn River Basin, the third largest hydrocarbon fields in North America.

Between the drilling, piping, and exporting of the natural gas in British Columbia, there is over $100 billion of proposed capital investment. Each project has one key component, all of the natural gas comes from Northeast BC.

A few of these massive capital projects proposed:

  • LNG Canada led by Royal Dutch Shell – $40,000,000,000 [source]
  • Pacific NorthWest LNG led by Petronas – $36,000,000,000 [source]
  • West Coast Canada LNG led by Exxon Mobil – $25,000,000,000 [source]