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CONTRIBUTION · 14th July 2012
From TD Reader
Petronas' deal is a perfect example.

Petronas is buying Calgary-based Progress Energy Resources (T.PRQ) for C$4.8 billion in cash. Including convertible debt the deal is valued at about C$5.5 billion. In announcing the deal, Petronas also said it has chosen Prince Rupert, BC, as the home of its planned LNG export terminal.

So the company is spending billions of dollars to acquire 1.9 trillion cubic feet of proven and probable gas reserves… but there is no guarantee that they will be able to export any of that gas in the foreseeable future.

Pipelines have become a highly contentious issue in North America – just as US citizens are embroiled in a debate over the Keystone XL pipeline which would transport oil sands crude south, Canadians are arguing the merits and liabilities of the Northern Gateway pipeline, which would move oil sands crude to the west coast for transport to Asia. One of the big arguments against Northern Gateway is the danger of sending tanker traffic through the coastal waters of northern BC, where an oil spill would be near impossible to clean and would irreparably damage a pristine ecosystem.

The same arguments will surface with natural gas. The LNG terminal that Petronas envisions in Prince Rupert would send loaded tankers through those same sensitive waters, an idea that is far from accepted in the region at this point. The pipelines ferrying natural gas to that terminal would cross mountainous terrain burdened with heavy winter snowpack and dramatic summer melts that regularly cause hillsides to slide and rivers to swell their banks and take out bridges – all points that opponents will use to argue that the potential risks outweigh the benefits.

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