A little while ago, we noted that the U.S. had seven operating LNG-for-export plants, and three more under construction.
Now make that four more under construction.
And the latest word is a further three have been approved, or soon will be, by investors. Indeed, nearly $30 billion in FIDs (Final Investment Decisions) is expected in US LNG.
Canada won’t catch up — and governments seem determined to ensure that. But Alberta’s Canadian Energy Centre does see Canada becoming the world’s fifth largest LNG producer by 2035.
We have LNG Canada building to come online in mid-2025, and it is considering doubling its output down the road through a potential Phase Two.
Woodfibre LNG is aiming to start production in 2027.
FortisBC’s proposed Tilbury LNG expansion could come, if approved by government, in 2026.
Also in BC, the Haisla Nation’s Cedar LNG project is thinking 2027. The big Ksi Lisims LNG project of the Nisga’a Nation proposes late 2027 or 2028. The proposed small-scale Port Edward LNG project is looking at 2025.
The push by the U.S. to increase LNG exports (along with a serious competitive push by Qatar) has led the nay-sayers to predict a long-term glut of LNG on the world market which they hope would derail expansion plans.
But professional market-watchers see, rather, impressive growth in world demand for LNG.
“LNG sellers look around this market and feel pretty confident that gas demand will be with us for decades to come,” says Ben Cahill, senior fellow with the Center for Strategic and International Studies, a Washington think tank.
Wael Sawan, CEO of Shell (a 40% partner in LNG Canada) says: “Liquefied natural gas will play an even bigger role in the energy system of the future than it plays today.”
Just look at Asian markets: China has $72-billion worth of LNG projects under construction or proposed. Make that $10 billion for India, $8 billion for Vietnam, and $4 billion for Thailand.
Looking ahead to 2035, the Canadian Energy Centre (using figures from respected Rystad Energy) sees Global LNG production reaching nearly 720 million tonnes by 2035. World output this year is expected to be around 456 million tonnes.
In 2035, the Alberta centre says, LNG demand in China is forecast to reach nearly 151 million tonnes, followed by Japan at 60 million tonnes, India at 52 million tonnes, South Korea at 50 million tonnes, and Indonesia at 31 million tonnes.
“The largest demand markets for LNG are clearly in Asia,” it adds. It sees Canada as the potential No. 5 world producer at nearly 32 million tonnes of LNG.
And B.C. has an advantage over U.S. Gulf Coast producers of shorter and cheaper shipping distances to overseas markets. Delivery time for B.C. LNG cargoes to Asia is seven to nine days at sea. For producers on the Gulf Coast it is 21-27 days. And they pay Panama Canal fees — which can hit US$598,000 per vessel, one way — that we avoid.
All this, and the LNG projects under way or proposed in BC, mean further welcome benefits for First Nations communities and peoples.
John Jack, elected chief councillor of the Huu-ay-aht First Nations (and treasurer of the First Nations LNG Alliance), says: “LNG projects in Canada are necessary to address the very real economic needs of British Columbians, especially Indigenous peoples and communities. . . .
“Like many inconvenient industries, LNG is essential for true economic reconciliation between indigenous communities and British Columbia and Canada.”
Hereditary chief Clifford White of the Gitxaala Nation: “Among many opportunities, LNG provides our Indigenous peoples and communities with training, higher education, skills, employment, higher paying jobs, local First Nation Government agreements, and environmental monitoring to protect Mother Earth and our communities.”
And Chief Councillor Crystal Smith of the Haisla Nation (chair of the First Nations LNG Alliance) points out that two of the LNG export projects proposed in B.C. are led by First Nations, one of them being the Haisla-led Cedar LNG proposal.
“We’re driving this project; we’ve got a great partner in Pembina [Pipeline] that are the experts when it comes to the facility build, but we are owners. We are building it to our values and holding it and keeping our principles at the board level and driving that through.
“So, the precedent has been set. We’ve proven to the world that Canada can provide the cleanest LNG energy to the rest of the world, and we need to continue to push in that direction.
“Again, the First Nations participation is huge. The way that we’ve been able to find our success and find balance in our territory, is worth noting. Every First Nation has that ability and the opportunity to do that. All levels of government and First Nations want that success.”
(Posted here 28 June 2023)
