No LNG, No problem!

With a previously touted mega project now gone south (literally), it was time for a little local spin.

The Wednesday Daily News provided some local feedback on Tuesday’s surprise announcement (well surprising to the residents and taxpayers of Prince Rupert anyways), that for WestPac it was adios Rupert and we're Texada Island bound.

From Mayor Herb Pond, to Prince Rupert Port CEO Don Krusel, it seems that as far as the North coast could see, the changing economic landscape of the LNG world isn’t that big a deal.

Despite apparently having been in the loop about its potential demise for a number of months, it appears that at the time, the best approach to the potentially disappointing news was to say nothing.

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Now that the the ship had sailed so to speak, the mayor provided an intriguing anaylsis of the machinations of project development.

“In my view, they were absolutely terrific in not overselling or over-promising, so in turn we didn’t over-plan for it,” said Pond.

The Mayor also decided to the take the glass half full approach in his post mortem on the now dead project:

“It’s losing something we never had. We weren’t banking on that, and it wasn’t a key part of our recovery plan,” said Prince Rupert Mayor Herb Pond.

Over at the Port Corporation, it would appear that it’s a case of there’s always somebody else knocking on the door. Don Krusel CEO of the Port Corporation, while leaving a light on for the folks at WestPac, suggested that there has been significant interest by other industrial commercial developers in the Ridley Island property previously designated for WestPac.

And while it may hurt to be spurned, we apparently are ready to bounce back at a moment’s notice, at least according to the Mayor. He wrapped up his personal outlook on development for the Daily News on Wednesday, with a closing paragraph of classic oscillating oration.

“I’m a big believer that every project, if we’re going to get behind it, has got to be a project that really makes sense,” said Pond on the subject of future development. “There’s no point in having one that’s so far off the bubble it’s questionable before we even get started. I think Rupert can afford now to be looking at projects that really make sense for the operator and make sense for us, and we’ll build long-term strengths in the community.”

It’s an interesting choice of wording, which may find repeat use on a few of the previously touted local developments, which seem to have stalled over the last little while.

The full examination of the local reaction to the WestPac change of plans, was featured on the front page of Wednesday’s Daily News.

LNG TERMINAL LOSS PLAYED DOWN AS WESTPAC MOVES ON

By Kris Schumacher
The Daily News
Wednesday, August 01, 2007

Pages one and three

WestPac LNG Corporation confirmed yesterday that the $300 million liquefied natural gas transshipment terminal planned for Ridley Island will no longer be happening. At least not anytime soon.

Instead, the company has decided to locate a new LNG terminal and natural gas-fired power generation facility on Texada Island, which will provide the North and South Coast, Vancouver Island and the Lower Mainland with access to a natural gas supply.

"We were well advanced in our environmental assessment work, but rapidly changing global market conditions have forced us to delay the Ridley Island project and re-evaluate its economics," said Mark Butler, president of WestPac LNG. "This is the prudent business decision to make."

WestPac LNG cited rising costs of materials and skilled labour as major concerns for the project, as well as pre-existing infrastructure and closeness to established markets as reasons for their decision to build on Texada Island.

WestPac has advised the Prince Rupert Port Authority about the delay and circumstances of the review of the project, and Butler says they are confident the B.C. market for fuel and power generation will be developed in the North Coast when demand grows in the future.

"The Prince Rupert Port Authority recognizes and appreciates the economic factors driving WestPac's business decision to prioritize their proposed southern LNG facility development," said Prince Rupert Port Authority President and CEO Don Krusel. "We look forward to continuing to work with WestPac in exploring future development opportunities in Prince Rupert."

Krusel also noted that as a result of the overwhelming international attention being given to the new Fairview Container Terminal development, there has been significant interest by other industrial commercial developers in the Ridley Island property previously designated for WestPac.

"It's losing something we never had. We weren't banking on that, and it wasn't a key part of our recovery plan," said Prince Rupert Mayor Herb Pond.

"It was something we would have loved to have, and would have certainly been a bonus. We understood from the beginning, and the people from WestPac were always very honest with us about not overselling the project, and that it was a speculative project. They were serious about it, but there were a lot decision points that had to be reached."

The announcement is something that both the port authority and the city have known about for several months, but was only made officially during a press conference yesterday.
"In my view, they were absolutely terrific in not overselling or over-promising, so in turn we didn't over-plan for it," said Pond.

"Obviously, we would have loved to have that project go ahead. It would have been some good jobs, it would have brought some more shipping into the area, and the LNG may well have stimulated some other business activity."

While WestPac has pulled the plug on the LNG project at Ridley for now, the company is hopeful that future growth will permit them to revisit development in the city.

"We appreciate the support of the Prince Rupert Port Authority and residents of Prince Rupert," said Butler. "We hope residents understand our commitment to developing West Coast LNG transshipment facilities that are viable and provide economic benefits to all B.C. residents."
"I'm a big believer that every project, if we're going to get behind it, has got to be a project that really makes sense," said Pond on the subject of future development. "There's no point in having one that's so far off the bubble it's questionable before we even get started. I think Rupert can afford now to be looking at projects that really make sense for the operator and make sense for us, and we'll build long-term strengths in the community."