Nexen Energy says it has made the strategic decision to cancel feasibility studies into its plan for a liquefied natural gas plant in Prince Rupert.
The company announced Thursday it was stopping its investigation activities on Aurora LNG effective immediately.
"Over the past four years, Aurora LNG has been conducting a thorough feasibility study on liquefying and shipping LNG from the northwest coast of British Columbia to Asian markets," the company said in an announcement.
"Through this feasibility study, Aurora LNG has determined that the current macro-economic environment does not currently support the partners’ vision of developing a large LNG business at the proposed Digby Island site."
Nexen is the former Alberta oil and gas company that was acquired in 2013 by CNOOC Ltd., a subsidiary of China National Offshore Oil Corp., for $15 billion.
The LNG project was a joint venture between Nexen and Japan's INPEX Corp.
The project, estimated between $17 billion to $20 billion not including associated pipeline infrastructure, was planned to ship 24 million tonnes of LNG per year. Its environmental review had resumed in June after being halted in the spring so Nexen could respond to some 1,168 submissions on the project sent to the B.C. Environmental Assessment Office.
Nexen had previously estimated its joint venture lands in Horn River and Cordova basins near Fort Nelson held between four trillion and 15 trillion cubic feet of recoverable contingent resources, and that the Liard joint venture lands contained an estimated five to 23 trillion cubic feet of prospective resources.
The company said its upstream operations in the Horn River basin will continue as it winds down operations in the Prince Rupert area.
"While disappointed in this outcome, Aurora LNG is proud of its work in northwest British Columbia over the past three years and the relationships it has built with local community members, Indigenous groups, stakeholders and government," the company said.
"Upstream operations from the partners’ Horn River natural gas assets in northeast British Columbia will continue, and the partners will also monitor the North American gas market to evaluate future upstream and downstream investments according to market conditions."
—with files from Business in Vancouver