Douglas Channel LNG, billed as the most likely project of 20 LNG proposals on B.C.’s coast to proceed because it wouldn’t need its own expensive new pipeline, was shelved by its partners on Thursday who cited worsening conditions in global energy markets.

The consortium’s lead partner, Calgary-headquartered AltaGas Ltd., made the announcement that it was halting development on the $600-million proposal at Kitimat “due to adverse economic conditions and worsening global energy price levels.”

“It’s really the manifestation of market conditions,” said AltaGas executive vice-president John Lowe. “We could not secure a customer at any price that would cover our costs.”

The news came as a blow to the Haisla First Nation in the region, which, due to the cancellation and delays of other projects, is now watching a “mini-boom” spurred in part by spending on LNG development work go bust.

Haisla Chief Councillor Ellis Ross said he received the news by way of a courtesy call from AltaGas on Wednesday evening, which coincided with a council meeting.

“There was a lot of disappointment across the table,” he said.

The Haisla, centred on Kitamaat Village, a community of 800 to 900 people, 11 kilometres from Kitimat, had seen a considerable boost from the $4-billion modernization of Rio Tinto Canada’s aluminum smelter and from opportunities in the development work on multiple LNG proposals on Douglas Channel.

However, the modernization project is now over, the LNG proposals are “slowing to a trickle,” Ross said, and “it’s kind of like the hangover from a mini-boom.”

AltaGas’ decision is also another blow to the B.C. government’s ambitions to see three export plants in operation by 2020 to develop LNG as a lucrative industry.

That prospect is looking further and further off with a growing global supply glut for LNG that has cast uncertainty over a sector now struggling to advance under the collapse in oil prices. That price collapse has sapped profits for major producers and robbed them of the cash flow they need to support big capital projects.

Minister for Natural Gas Development Rich Coleman was not available for an interview on Wednesday, but his office made comments available from an earlier media scrum in Victoria in which he played down the impact of AltaGas’ decision.

“It’s not great,” Coleman said. “I want all of (the proposals) to go ahead. But as I’ve always said, out of 20, we may not get all of them.”

Coleman said AltaGas is still advancing a $500-million to $600-million propane export facility at Prince Rupert.

Thursday’s announcement by AltaGas followed news on Feb. 4 that the Royal Dutch Shell-led consortium proposing a $50-billion LNG megaproject centred at Kitimat had postponed its final investment decision at least until the end of the year.

That project, LNG Canada, was viewed as a front-runner among major LNG proposals because its partners includes customers — Korean utility firm Kogas, Japan’s Mitsubishi and PetroChina — with agreements to purchase portions of the plant’s output.

Douglas Channel LNG was devised as a small project that would use excess capacity in the existing Pacific Northwest Gas utility pipeline to Kitimat to chill gas into liquid on a floating barge-based facility.