The LNG Canada joint venture led by Royal Dutch Shell PLC has delayed its final investment decision on exporting liquefied natural gas from Kitimat in northern British Columbia.
Andy Calitz, LNG Canada's chief executive officer, had been scheduled to announce a decision on whether to proceed with the project by the end of this year.
But on Monday, he said there isn't any new target set to determine when there might be a revised timeline.
"Our project has benefited from the overwhelming support of the B.C. government, our First Nations and of the Kitimat community. We would not have advanced the project thus far without it," Mr. Calitz said during a conference call. "I can't say enough about how valuable this support has been and how important it will be as we look at a range of options to move the project forward."
LNG Canada forecasts that it would need to invest up to $40-billion on construction for the export terminal.
Shell holds 50 per cent of LNG Canada. PetroChina Co. Ltd. owns 20 per cent of the project, while Japan's Mitsubishi Corp. and South Korea's Kogas each have a 15 per cent stake.
Premier Christy Clark campaigned hard during the 2013 provincial election on the prospect of a booming LNG sector, boasting that her Liberals would guide the fledgling industry and transform the provincial economy.
But LNG prices in Asia have plunged while supplies soar globally. Last month, the International Energy Agency forecast a worldwide glut of LNG over the next five years, with demand weakening in Japan and South Korea while supply rises in Australia and the United States.
Mr. Calitz emphasized that Shell and its three partners made the move jointly to delay their final investment decision. "The project has not been cancelled," he said.
The LNG Canada project already had been stalled earlier this year. In February, Shell announced a nine-month delay for making a decision, saying it would postpone its key ruling until the end of 2016 instead of the first quarter.
Shell and other energy companies have been facing challenges in operating during a time of low prices for crude oil, natural gas and LNG. Shell completed its acquisition in March of BG Group PLC.
Haisla Nation chief councillor Ellis Ross had been counting on LNG Canada to generate economic spin-offs, including for his members in Kitamaat Village.
"Haisla Nation Council very firmly believes in the future of liquefied natural gas for the Kitimat Valley and Haisla territory. It is an industry which has the capacity to grow jobs, provide new training opportunities and provide a sustained quality of life for Haisla members," Mr. Ross said in a statement. "It's worth remembering that LNG Canada is a relatively new project to the area, and decisions on major projects such as these can take a long time to reach."
Industry experts say the weak state of the LNG industry is casting doubt on all 20 proposals to export LNG from British Columbia.
But Rich Coleman, B.C.'s Natural Gas Development Minister, said LNG Canada is still a promising opportunity.
"The provincial government remains optimistic about the future. Our government is focused on building a viable, globally competitive industry to create new jobs and secure long-term economic benefits for all British Columbians," Mr. Coleman said in a release late Monday.
He said the Shell-led group is facing difficult economic conditions in global energy markets, but LNG exports from Kitimat have the support of First Nations.
LNG Canada's announcement also delays TransCanada Corp.'s plans to build the $4.7-billion Coastal GasLink pipeline from northeastern British Columbia to Kitimat.