Few investors have heard of Kitimat, Canada. But this town of just over 8,000 people looks to be at the epicentre of a multi-billion dollar boom.
The reason is LNG. A topic that’s becoming big news in western Canada.
Especially after last week. When the government of Malaysia announced it plans to spend $35 billion constructing a gas liquefaction terminal and associated infrastructure on the Canadian coast near Kitimat.
Malaysian state firm Petronas will almost certainly feed the LNG development with gas from the British Columbia properties it acquired by buying Progress Energy Resources last year. A theme now becoming common–shale gas in BC looks to be for real. And a number of companies are eying this high-potential area as feedstock for Pacific LNG shipments.
In fact, there are at least five LNG projects in various stages of planning and permitting within western Canada right now. Estimates put each one at a price tag in the tens of billions. There is speculation that numbers could run into the hundreds of billions.
That’s an astonishing amount of money ready to be poured into the northwestern Canadian wilderness. If these investments go ahead (and announcements like the recent news from Petronas make it appear they will), the demand for construction equipment, labor and pipeline services is going to be astronomical.
Much of this spending needs to take place years before an LNG terminal ships its first gas. Meaning that money could start landing on the ground as early as the coming year.
Believe what you want about the wisdom of LNG in Canada. But the fact is, big spenders are backing the play. And that could mean a boom for the services sector in this out-of-the-way part of the world.
Here’s to blazing a trail,
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