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One outlook sees ‘six more LNG-Canada-sized projects’
The LNG carrier Gaslog Glasgow loading LNG Canada’s first export cargo (in 2025)
By Resource Works
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While Ottawa talks of Canada becoming “an energy superpower,” with LNG exports of as much as 100 million tonnes a year, an independent research report sees Canada reaching more like 45 million tonnes of export capacity by 2030.
The report is from the Calgary office of law firm Norton Rose Fulbright, which says Canada’s LNG industry is “poised for continued growth” this year, thanks to “demand growth in price-sensitive Asian markets with growing import capacity.”
It says new projects in progress should give Canada around 19 million tonnes a year (MTPA) of export capacity by 2030, and other projects expected to take final investment decisions this year could lead to 45 MTPA by the early 2030s.
A massive capacity expansion
Meanwhile, business leaders at a Greater Vancouver Board of Trade Event were told that “We think there could be roughly six more LNG-Canada-sized projects that easily can get done.”
That was from Dane Gregoris, Calgary-based managing director at energy intelligence firm Enverus, who said he looks for final investment decisions this year on two projects: Phase 2 expansion of LNG Canada at Kitimat (which would double its output capacity to 28 million tonnes a year) and on Nisga’a Nation’s Ksi Lisims LNG in northern BC (which would produce 12 million tonnes).
Shannon Young, general counsel and vice-president of external affairs for Petronas Energy Canada, told the event that “a heck of a lot more LNG” is needed to grow British Columbia’s economy, and that BC needs a “comprehensive” natural gas strategy with set export targets.
Shifting political tides in Quebec
At the same time there came a sign from Quebec that its government may now be open to LNG projects, after years of opposition to them.
The National Assembly soundly defeated a motion to block Marinevest Energy’s proposed natural-gas pipeline and LNG project.
Premier François Legault had said: “If it pays off for Quebecers, we’ll look at it. If it doesn’t pay off for Quebecers, we won’t look at it.” In 2021, his government axed the GNL Québec project in Saguenay, a project similar to Marinvest Energy’s proposal.
The Montreal Economic Institute said an LNG plant should be “a priority project for Quebec, to supply LNG to Europe. That’s exactly what Norwegian-owned Marinevest Energy has in mind.
Surging global demand
As Norton Rose Fulbright issued its report, Japan’s biggest oil and gas company, Inpex, forecast that global demand for LNG will grow by 75% (to some 700 million tonnes a year) in 2035. It said this could mean a shortage in the Pacific coastal region, including Asia.
Norton Rose Fulbright said Canada’s proximity to Asian and European markets, abundant reserves and growing export capacity “position it competitively as global supply expands.”
Canada’s responsible production and the lower-emission profile of Canadian LNG “also enhance its attractiveness to international buyers with decarbonization goals.”
And the law firm added: “There are also many potential domestic benefits to the growth of Canada’s LNG industry. The persistent premium on LNG prices in international markets compared to domestic gas prices in Canada continues to represent a significant economic opportunity for Canadian producers and project proponents.
Domestic benefits and lingering hurdles
“In parallel, ongoing investments in the Canadian LNG value chain could stimulate economic growth, job creation and strengthen relationships with Indigenous groups.”
All in all, the lawyers’ report said, “Canada’s LNG industry is positioned for significant expansion, supported by strong federal endorsement and recognition of Canada’s capabilities as an ‘energy superpower.’
But it saw challenges: “While federal initiatives are accelerating infrastructure development, LNG project proponents must continue to navigate intensifying supply competition, domestic regulatory and environmental hurdles and geopolitical volatility.”
Don MacLachlan is a writer for Resource Works, a non-partisan organization that champions responsible resource development in British Columbia and Canada. Reach Don at [email protected].
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