Vaughn Palmer: Big B.C. pension plan pumps millions in U.S. LNG project

VICTORIA — While B.C. continues to wait — and wait — for the first big liquefied natural gas project, the province’s public sector pensions have quietly been investing millions in a rival LNG exporter based in the U.S.

Cheniere Energy, operator of one LNG terminal in Louisiana and nearing completion of a second in Texas, reported the increased stake late last month.

“B.C. Investment Management Corporation grew its position by 37.6 per cent during the fourth quarter,” disclosed the company in an investment filing. “BCIMC now owns 109, 417 shares valued at $5,894,000 after buying an additional 29,925 shares.”

BCIMC manages pension investments for public servants, teachers, college instructors, university professors, municipal workers and others in the public sector.

A corporation spokesperson this week confirmed the increased stake in Cheniere, though per long-standing policy declined to discuss either investment strategies or holdings.

The BCIMC website indicates that the pension fund trustees’ appoint the majority of members to the board, which sets overall strategies, but leaves actual investment decisions to a team of professional managers.

From the mission statement: “We deliver to our clients the highest return for a given level of risk, at a reasonable cost, while recognizing our responsibility to the broader society through our governance, social, and environmental related activities.”

The Cheniere investment, while accounting for only a tiny fraction of the $135 billion in assets managed by the corporation, looks like a good bet in terms of anticipated returns.

The company took the plunge into the LNG-for-export market in 2011, about the same time as B.C. began talking up the possibilities under Premier Christy Clark.

While the B.C. pace was glacial, Cheniere had its first production train up and running at Sabine Pass in Louisiana two years ago. The second terminal in Corpus Christi is scheduled to come on line this spring.

Targeting the same Asian markets as B.C., the company earlier this year signed a long-term export agreement with China and recently sent its first LNG shipment to India under a 20-year deal. With ready access to the expanded Panama Canal, it is well poised to take advantage of a projected one-third growth in global LNG demand by early in the next decade.

The main driver behind the shift is China, busy weaning itself off coal by shifting to relatively cleaner natural gas, an opportunity cited many times by Christy Clark to much mockery from political opponents.

As for B.C.’s current prospects, I asked Energy Minister Michelle Mungall …read more

Source:: Vancouver Sun – Politics

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