Imperial Oil has expressed interest in a British Columbia site for a liquefied natural gas (LNG) plant. The site is at Grassy Point, north of Prince Rupert, and is one of several the company is said to be considering. Imperial is owned by Exxon Mobil and has been considering building a gas liquefaction plant in BC for some time. It holds large shale gas reserves in the province, including those formerly owned by Celtic Resources, which it acquired earlier this year.
Imperial Oil has seen start-up costs for an oil sands project at Kearl, Alberta. Once operational it will produce 110,000 barrels per day of non-upgraded bitumen. According to Reuters, the project has seen cost overruns of nearly two-thirds the original budget of $7.9 billion.
Besides the cost overruns at Kearl, the company’s ability to pay for new projects such as an LNG plant is connected to its earnings, which have fallen this year. Imperial just reported first-quarter profits down 21 per cent compared to last year. Profits fell $217 million to $798 million. The drop is mainly attributable to lower prices for bitumen produced at the company’s Cold Lake operation, higher refinery and maintenance costs and higher production expenditures.
A spokesman for Imperial Oil said that LNG projects were “complex,” with a lot of components, and difficult to put absolute timelines to, but they are working on it.
A number of other oil giants, including Chevron, Shell and Petronas are in early stages of building LNG facilities in BC.