A real estate play on British Columbia's LNG bonanza

Peter Kennedy Peter Kennedy, Stockhouse
6 Comments| February 6, 2014


As British Columbia gears up for a hoped-for economic bonanza tied to the development of natural gas production and export facilities, newsletter writers say the best way for investors to get in on the ground floor is through the service providers.

This is a reference to the companies that will provide equipment and services to Exxon Mobil Corp. (NYSE: XOM, Stock Forum), Imperial Oil Ltd. (TSX: T.IMO, Stock Forum) and other energy giants who have joined the race to develop liquefied natural gas operations and related pipeline and drilling infrastructure in B.C.

But Vancouver property developer Dave Steele sees an alternative.

The Western Canadian Properties Group chief executive is betting that as this burgeoning industry begins to take shape over the next few years, the population of in northeastern B.C. communities like Fort St. John and Dawson Creek will soar.

So Steele is offering speculators the chance to invest in real estate projects that he says will be needed to accommodate the tens of thousands of oil and gas industry workers who are expected to flock to those regions in search of jobs.

“It’s called mining the miners,’’ he said. “Everybody needs a place to stay.’’

A 25-year veteran of the property development sector, Steele is focused on Fort St. John and Dawson Creek because these communities are the “ground zero’’ of the emerging liquefied natural gas industry, in much the same way that Fort McMurray has been ground zero for the Alberta oilsands sector.

It is where giants like Encana Corp. (TSX: T.ECA, Stock Forum), Canadian Natural Resources Ltd. (TSX: T.CNQ, Stock Forum) and Talisman Energy Inc. (TSX: T.TLM, Stock Forum) are working to drill off the natural gas reserves that are expected to be transported by pipeline to the B.C. coast.

The gas will then be liquefied and loaded onto ships before being transported to customers in Asia, who are expected to pay premium prices for the gas production.

Speaking to a seminar hosted by Richardson GMP on Tuesday, Steele said the combined population of Fort St. John and Dawson Creek is currently around 35,000.

But that number is expected to reach 64,000 in the next six years.

The need for skilled workers, and related housing is also expected to be driven by the development of the Site C Hydro electric dam at a cost of about $7.9 billion.

In a bid to accommodate the expected need for more housing in the area, Western Canadian Properties is about to start construction this spring of six duplexes, 10 condominiums, and six townhomes in Fort St. John.

It is also launching construction of four duplexes, and ten townhomes in Dawson Creek.

A party of around 40 would-be buyers are scheduled to fly from Vancouver to Fort St. John this weekend for a look at the region and take a tour of the project locations.

Investors are being offered two options:
  1. Invest directly by purchasing title to new condos, townhouses, or duplexes. The townhomes in Fort St. John, for example, are priced at between $264,900 and $269,900.
  2. Invest in RSP-eligible limited partnerships in the Blue Sky Opportunity fund, which is being set up to buy a portfolio of properties in high growth areas in northeastern B.C. and northwestern Alberta. The partnerships are being sold by investment advisors at Richardson GMP.
The minimum required investment for the limited partnerships is $10,000.

Steele said any buyers are running the risk that development will not proceed as quickly as the B.C. government is expecting.

Tags: OIL & GAS E&P OIL & GAS INTEGRATED ENERGY

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kingpost
Good story Peter...I was glad you said "hoped-for" bonanza... Unfortunately polititians have a poor record planning for natural resource shipping lately (Keystone)... I hope the bonanza does happen, but unfortunately I think it is impossible... Japan and China and the USA (3 key markets) are developing their own nat gas and all three could be self sufficient ... then throw in Mexico opening its huge gas and oil resourses up to developement, argentina , Brazil, Venezuela and other so...
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February 7, 2014
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4SeasVentures
I suggest investing in INFRASTRUCTURE stocks in area. An example is v.HBK. 43-101 ,72+ million tonne , aggregate deposit. 2 hours from Rupert,by barge.Work Permit pending!Notice of occupation already in hand.
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February 6, 2014
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Gasinvest
So,what are they all thinking?I get it...First Nations Peoples and what they want have no meaning at all.Just run right over them?Don't think so!
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February 7, 2014
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jtsmith
Great article Peter. Thanks.
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February 7, 2014
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trapmaster
Peter do your reserch on the LNG on bc. lot of gas will also come from ab. and a lot of well in bc. are already drilled an capped, waiting for the west coast LNG transport. You ever lived in the area or are you just talking about things to make you money or are you wish full tinking
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February 6, 2014
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EOIM
Another low priced one is Stikine Energy that owns more than 80 hectares of Frac Sand asset. The land value of their asset is currently worth more than the $2 million market cap.
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February 7, 2014
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