Buffett Pulls Out Of Canadian LNG Project As Opposition Intensifies

Warren Buffett’s Berkshire Hathaway has pulled out of a planned investment in the Saguenay LNG project in Quebec, Canada, suggesting that harder times are ahead for the country’s LNG ambitions.

CBC reports the investment company had shelved its plan to put $3 billion (C$4 billion) into the $7.1-billion (C$9.5-billion) LNG project because of the "current Canadian political context," according to a spokeswoman for the company behind the project, GNL Québec.

Stephanie Fortin, however, added that the pullout of Berkshire Hathaway will not put an end to the project, even if its impact will be felt.

The news is the latest sign that all may not be well for Canadian LNG plans. Last year, there were reports that Chevron was planning to sell its stake in the Kitimat LNG project, as was Australia’s Woodside Petroleum, amid a growing LNG glut. Now, on top of the glut, the LNG industry in Canada has been fighting an uphill battle with environmentalist opponents to every new energy project.

Last month, environmentalists staged a series of railway blockades in an attempt to stop the construction of the Coastal GasLink pipeline that should deliver natural gas to the only LNG project that has started construction: the LNG Canada facility in British Columbia.

Related: Oil Prices Collapse 8% As Novak Tells OPEC+ To Pump At Will

In the second week of February alone, Canadian National Railways had to cancel 400 trains as environmentalists and rights activists blockaded rail lines and ports, as well as road intersections and government offices as a demonstration of solidarity with members of a First Nation, the Wet’suwet’en, who oppose the Coastal Gaslink pipeline.

The railway operator then started shutting off its operations in eastern Canada and its chief executive warned that it would have to lay off up to 6,000 people if the blockades continue, although the layoffs will be temporary.

The blockades only began to be taken down this week, after Wet’suwet’en chiefs reached an agreement with representatives of the federal and British Columbian governments to resolve some of the problems around the Coastal GasLink project. The opponents, however, stand ready to resume the protests if they feel the need to do it, which has substantially heightened the uncertainty around Canada’s LNG plans.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• OPEC Presents Russia With Production Cut Ultimatum
  
• Will We Really See Negative Oil Demand Growth This Year?
  
• The Hydrogen Hype Hits The Middle East