Terrace’s leaders are anticipating a slump in economic activity here in the wake of LNG Canada’s decision to indefinitely delay its proposed natural gas liquefaction project in Kitimat.
One developer has already put the brakes on a project planned for the city.
“It’s going to be tough on everyone and I’m sure the region is already feeling it,” said Kitselas chief councillor Joseph Bevan. “It’s disappointing in so many different ways.”
LNG Canada partners announced July 11 that they are postponing a final investment decision that was planned for later this year, citing market conditions and low oil prices.
Venturers Shell, PetroChina, Mitsubishi and Kogas have chosen to continue site preparation for the coastal natural gas export facility in the meantime.
The decision also stalls TransCanada’s Coastal GasLink pipeline which would feed the proposed facility.
Terrace Mayor Carol Leclerc said the delay was understandable, though she remained optimistic that the region was still in line for future investment.
“I definitely think it’s disappointing because I think it’s going to happen, just people are hoping for sooner rather than later,” she said.
But Leclerc did add that the city’s primary focus is on developing the Skeena industrial park adjacent to the airport.
“We support LNG in Kitimat, in Port Edward and in Prince Rupert, but our bread and butter is going to be at the airport lands,” she noted.
A large portion of the park is now owned by a Chinese developer that, two years ago, inked a sales deal with the city for $12 million.
But undeveloped lots on Terrace’s southside may remain empty for longer than expected.
The developer of a potential Motel 6 along Keith Avenue says he won’t move ahead with the project until the Canadian energy industry picks up.
“We would like to start construction, but we have to wait for if the business economy improves in Terrace [and] especially in Saskatchewan as well,” said landowner and Saskatchewan developer Joseph Tesar.
“Our plans and blueprint are ready to go, so we are ready except for the economic conditions . . . and with those announcements in northern B.C. that’s putting the brakes on our project as well,” he added.
He noted there is currently no timeline for when construction could start on the motel, only saying he will wait on more news about proposed oil and gas investments in B.C.
Chief Bevan says he understands that delays like these are frustrating.
“You can tell that something is going to happen, it’s just a matter of when, it’s tough to sit back and wait,” he said.
“Especially for Kitselas, we had a taste of what life could look like and what it could bring with our Pacific Trail Pipeline experience,” he said about the nation’s deal with the Chevron-driven pipeline.
He noted that industry jobs such as these have decreased unemployment in the community substantially.
Kitselas has invested in planning to train for their members in anticipation of an LNG boom here.
“We’ve geared up and now we’re looking at it in the context of ‘what’s next.’”
“We’ve had to put some things on hold and actually it has given us a bit more time to deal with how we’re going to roll out training,” he said.
The Terrace Chamber of Commerce was also preparing for a final investment decision from LNG Canada this year.
Val Gauvin, president of the chamber, said they were putting together a package showing the grassroots support for LNG in Terrace to forward to the venturer partners.
But now those plans have also been put on hold.
“It’s definitely not good news and it’s not the news we were hoping for, it just means that we’re going to have to continue on in a bit of a slacked economy until we see one of these projects come out of the ground,” Gauvin said of the delayed decision.
“Some of the newer businesses that have moved into town with the expectation of the LNG project, some of the companies that rent equipment . . . those ones are going to be hurt the most,” she said.
“Businesses that have been around a long time, we’ve been through this before and we know how to survive as a business in Terrace when things are slow.”
“The newer ones may consider shutting down or moving,” she speculated.
Gauvin said that the LNG announcement is disappointing, but not the end of the world as there are other promising projects in the region such as the Brucejack mine.
“LNG isn’t the only project going on in Terrace,” she said.“So that’s definitely helping our economy and the surrounding First Nations continue to develop.”