AltaGas Ltd. has halted plans to export liquefied natural gas from British Columbia's north coast amid a worldwide glut of the fuel.
AltaGas and its partners in the Douglas Channel LNG project fell short of their goal of signing sufficient long-term contracts with Asian buyers to take delivery of LNG in what the industry calls "off-take."
The small-scale joint venture had been seeking to begin LNG exports in 2018 from a floating facility near Kitimat in northwest British Columbia.
"The Douglas Channel consortium has been unable to secure meaningful off-take agreements for the project," AltaGas chief executive officer David Cornhill said Thursday during the company's fourth-quarter conference call.
While the AltaGas-led group made significant strides, "without a meaningful off-take agreement, the consortium can no longer continue the development of the project," he said.
Other members of the LNG group are Exmar NV, Idemitsu Kosan Co. Ltd. and EDF Trading Ltd. The partners decided to shelve the joint venture, despite receiving a favourable federal ruling related to import duties on the planned floating terminal.
LNG prices in Asia tumbled last year as a wave of exports of natural gas in liquid form hit global markets. New LNG exports are forecast over the next four years, widening the gap between supply and demand.
Calgary-based AltaGas announced last October that Mr. Cornhill will retire on April 15. He will be succeeded by David Harris, the firm's president and chief operating officer.
The Haisla First Nation assembled properties on the western shores of Douglas Channel. Two pieces of land are owned outright by the Haisla after acquisitions in 2013 from Rio Tinto Alcan.
One of those sites, District Lot 99, remains earmarked for the much-delayed Douglas Channel LNG project and potentially for the AltaGas-led Triton LNG venture.
Mr. Harris said Triton, a partnership with Idemitsu, is "certainly on the backburner, slow burn."
Douglas Channel LNG had been considered one of the promising B.C. energy ventures when it received an export licence in early 2012. But the proposal lost momentum when a key backer ran into financial trouble in 2013 and the project ended up in a protracted case under court protection from creditors. A new group led by AltaGas took control of the project in early 2015.
The weak state of the oil and gas industry is casting doubt on all 20 proposals to export LNG from British Columbia. Royal Dutch Shell PLC announced in early February that the LNG Canada joint venture in Kitimat is being delayed by about nine months, saying the partners are now aiming to make a final investment decision at the end of 2016 instead of the first quarter.