Warren Buffett’s company bails on Saguenay LNG project because of ‘Canadian political context’
Warren Buffett’s investment company Berkshire Hathaway has decided not to invest $4 billion in a liquefied natural gas (LNG) plant by the Saguenay port, according to Radio-Canada.
The marine terminal to ship LNG to overseas markets is slated to be built roughly 230 kilometres northeast of Quebec City, at a cost of $9.5 billion.
News broke Thursday morning in La Pressethat Berkshire Hathaway was walking away from the project.
Stéphanie Fortin, head of communications for the company behind the project, GNL Québec, confirmed the company had lost a significant potential investor, but did not want to say who it is.
She did say, however, that the company lost the investor because of the «current Canadian political context.»
She said with «instability» in the last few weeks, such as ongoing rail blockades, foreign investors are getting nervous.
This won’t keep the project from progressing, Fortin said, nor will it mean job losses in the immediate future.
She said the loss won’t be without an impact, though.
The LNG project also involves the construction of a pipeline across a 782-kilometre stretch of the province — from northern Ontario to Saguenay — to transport natural gas from Western Canada.
The goal is to export 11 million tonnes of LNG per year.
Michel Potvin, deputy mayor of Saguenay, told Radio-Canada’s Tout un matin that this represents a real setback for the project.
«It’s concerning when we talk about an investor putting in $4 billion of $9 billion. It’s clear that Mr. Buffet has good reasons. We’re seeing the rail crisis — that’s surely one of the reasons.»
He said he understands, given the current discussion around the Coastal GasLink pipeline in B.C.
In Quebec, the LNG project has also stirred opposition from members of Innu communities. The proposed pipeline would go through their ancestral territory.
«It takes the acceptance of Indigenous people,» Potvin said. «In our head, here in Saguenay, we thought we had it. We thought it was accepted by the people. What we’re seeing is that actually nothing is certain.»
Confidence must be restored, says business group
The Quebec Federation of Chambers of Commerce released a statement Thursday calling on the provincial and federal governments to reassure potential investors.
«This climate of uncertainty is deplorable and needs to be reversed,» said President Charles Milliard in the news release.
The federation, which represents 130 chambers of commerce across the province, says the country is facing «an image crisis» on the international stage.
«The governments of Quebec and of Canada need to fix this significant damage in order to support businesses impacted by the rail blockades,» Milliard said.
The federation is asking for «concrete measures» to restore confidence and encourage foreign investment in Quebec.
GNL Québec said that transforming the gas to liquid with hydroelectricity would make the project clean — but many environmental groups have been critical of those claims.
In June 2019, more than 150 scientists published an open letter seeking to debunk claims by promoters that the project will benefit the environment.
Concerns have also been raised about the impact on endangered beluga whales in the St. Lawrence Estuary because of noise pollution and increased tanker traffic in the Saguenay River.
Quebec’s environmental review agency, the BAPE, will begin public hearings on the project later this month in the Saguenay.
At the end of the process, the BAPE will produce a report for the Environment Ministry, which may contain recommendations.
The Quebec government will get the final say on whether the project can go ahead.
