Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) has dropped a gas export project in Quebec after weeks of rail blockades and an oversupplied market eroded the facility’s appeal.
The investment giant was going to provide $4 billion ($3 billion U.S.) for GNL Quebec’s proposed liquefied natural gas plant about 500 kilometres northeast of Montreal, where the project is based. However, La Presse and Radio-Canada reported that Berkshire was walking away from the project.
It’s the second time in two weeks that political uncertainty in energy-rich Canada is blamed for killing a major investment in the sector. Teck Resources Ltd. (T.TECK.B) last month pulled its application for a controversial new oil-sands mine in Alberta, accusing the country of not having a clear framework to reconcile resource development and climate change.
But the global market for oil and gas isn’t looking attractive for investments either, with the coronavirus outbreak just dealing the latest blow to the outlook for demand. Several LNG shipments are being canceled around the world, and U.S. developers are being hammered in the equity and bond markets.
GNL Quebec currently has about 15 financial backers and still need to go through hearings and certifications processes. The $9-billion project -- which aims to bring gas from Alberta to freeze it into a liquid at Saguenay before shipping it overseas -- would create as many as 300 jobs locally.
Berkshire, meanwhile, saw its prices slump $9,112.75, or 2.9%, mid-morning Thursday to $305,887.25.
