Warren Buffett reportedly pulls out of LNG project in Quebec due to 'challenges' in Canada

  • Mar 05, 2020
  • Financial Post

GNL Quebec, which was spearheading the project, confirmed it had lost a major potential investor in the $9-billion Energie Saguenay project

CALGARY — Warren Buffett, one of the world’s most influential investors, has reportedly pulled out of a planned investment in a liquefied natural gas project in Quebec, dealing another blow to Canada’s resource industry that has already seen an exodus of capital.

GNL Quebec, which was spearheading the project, confirmed Thursday it had lost a major potential investor in the $9-billion Energie Saguenay project, which would export Western Canadian natural gas from a proposed facility in Saguenay, Que.

“This was a major private investor who left at the last minute,” GNL Quebec spokesperson Stephanie Fortin said in an interview.

She declined to provide the name of the investor or confirm the identity, but Montreal-based La Presse reported Thursday that it was Berkshire Hathaway Inc., citing unnamed sources.

“The reason is the recent challenge in the Canadian political context,” Fortin said.

Berkshire Hathaway did not respond to a request for comment.

Warren Buffett is the fourth richest man in the world with an estimated wealth of $85.7 billion in wealth, who built Berkshire Hathaway into a $508-billion conglomerate over the past few decades.

He is considered among the world’s most strategic investors and other institutions often take their investment cues from the 89-year-old ‘Oracle of Omaha.’

Canada’s resource sector has been the subject of intense security and regulatory delays that has seen other international companies such as Chevron Corp. and Total ASA sell majority of their assets in the country.

Earlier this month, Teck Resources Ltd. withdrew its application for the $20-billion Frontier oilsands mine project, citing regulatory delays and clash within Canada about climate change and resource development.

In recent weeks, rail blockades and protests have also snarled major infrastructure in Canada, disrupting port shipments and stalling the delivery of grains and other commodities across the country, creating an uncertain business environment in the country.

“This, without hearing directly from Berkshire Hathaway, would be similar to what we’ve heard from other institutional investors,” said Jeremy McCrea, analyst with Raymond James.

McCrea said the exodus of investors from the Canadian energy industry is evident from the dramatic, roughly 80 per cent decline in share prices of domestic players.

More to come…

Financial Post

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