A Malaysian company’s decision to delay a $32 billion liquefied natural gas project in British Columbia demonstrates the United States’ cost advantage over Canada, according to an article on Bloomberg.com.
Petroliam Nasional Bhd., known as Petronas, is a Malaysian nationally owned energy producer. The company is pressuring contractors to reduce costs on the British Columbia project, which is supposed to send the first exports of LNG to Asia in early 2019, Michael Culbert, chief executive officer of the Pacific NorthWest LNG project, told Bloomberg News.
U.S. suppliers can deliver LNG to Asia for $1 to $2 less per thousand cubic feet than Canadian projects, he said.
“We’ve got real competition that is coming out of the Gulf Coast projects,” Culbert said. “With the changing oil prices, contractors may not be as busy as they thought they would be.”
Although some U.S. projects are already under construction — Cheniere’s Sabine Pass project in Cameron Parish is expected to begin exporting LNG in 2015 — their counterparts in Canada have yet to break ground.
In October, BG Group Plc announced it would delay its Canadian project because of U.S. competition.