Blog: Key Asian markets seen for B.C. LNG

Japan, South Korea and Taiwan are good potential markets for B.C. liquefied natural gas — and for blue hydrogen and ammonia derived from our natural gas.

This assessment is in a new report from the First Nations Climate Initiative (FNCI), whose members are the Haisla, Nisga’a, Metlakatla and Halfway River Nations.

Both the Haisla and Nisga’a plan LNG projects; the Haisla with Cedar LNG and the Nisga’a with Ksi Lisims LNG.

The report notes: “We will focus on Asia because the region’s demand growth for all competing forms of energy will be the central factor in the market, technological and geopolitical forces determining not just winners and losers in LNG but in all likelihood the nature of the end game in efforts to tackle global climate change as well.”

Of Asian demand for LNG, it says: “While the most recent outlook from the International Energy Agency (IEA) sees a peak for global gas demand by 2030, the same scenario shows that gas demand in Asia remains stronger than other regions. Moreover, other forecasts such as that of the Institute of Energy Economics Japan (IEEJ) see a much longer-term sustained growth outlook for LNG.”

And: “Japan and Korea stand out as markets aligned with Canada on climate and energy security policy, with high levels of existing gas infrastructure, and heavy investment in industrial decarbonization, blue ammonia and hydrogen, and carbon capture and storage that will provide longer-term partnership opportunities for Western Canadian gas exporters.”

The report was prepared for FNCI by consultant Robert J. Johnston, executive director at the Center on Global Energy Policy at Columbia University.

He also sees other potential markets: “Canadian LNG will also compete to replace expiring LNG contracts from countries such as Brunei, Indonesia, and Malaysia, alongside new sources of demand.”

In an interview with Business in Vancouver, Johnston added Philippines, Vietnam, Singapore and Thailand as potential markets as they add LNG import capacity. And he said he wouldn’t rule out China, though “strong competition from coal and renewables” may affect LNG demand.

“I think the Northeast Asian markets — Japan, Korea, Taiwan — are particularly well suited for Canada. They’re not adding a lot of new LNG capacity but they do have a lot of existing LNG capacity in place they can use to import gas from Canada.”

There are a number of cautions in his 38-page report, including these:

  • “Absolute gas demand growth in Japan and Korea will be modest or even decline in the decade ahead, particularly compared to faster growth markets in China, India, and ASEAN (Association of Southeast Asian Nations) countries.”
  • “Long-term gas forecasts are highly uncertain given the wide range of possible pathways and rates of change in the energy mix related to climate policy.”
  • “The rapid growth and falling prices for renewable electricity will change the role for gas, with competition shifting from baseload to a battle with coal and long-duration battery storage for backing up renewables.”
  • “Coal-to-gas switching is promising but expectations should be tempered by the dominant incumbent role of coal in most Asian electricity markets. Canadian LNG should target specific project level opportunities for fuel-switching, linked to government coal phaseout plans (as in Vietnam) or fuel oil (where switching economics for LNG are more favourable) or as an intermittency solution for wind/solar projects where gas will compete favourably with battery storage and hydrogen in many markets.”

Says the First Nations Climate Initiative: “FNCI commissioned this phase one report in order to identify realistic pathways for western Canadian LNG to contribute to decarbonization efforts in Asian countries. . . .

“The objective for phase two of our work in this area is to activate as many of these pathways as we can; to make them real rather than simply opportunities or potential outcomes. To this end we are looking for partners with other Indigenous Nations and levels of government, the private sector and civil society organizations. Our scoping efforts for phase two are already underway and we plan to deliver results in 2024.

“The imperatives of climate action and real reconciliation with Indigenous people in Canada require our immediate collective action.”

The FNCI’s foundation: “The First Nations Climate Initiative (FNCI) is an Indigenous-led collaborative forum dedicated to the fight against climate change, alleviating First Nations’ poverty, restoring ecosystems in First Nations’ traditional territories, and enabling Indigenous people to be leading actors in the decarbonized economy.”
All of which goals are supported by our First Nations LNG Alliance.

As our CEO, Karen Ogen, said at the COP28 world climate conference in Dubai: ““We want to preserve and protect our environment, so that means that we want to have the highest environmental standards possible.”

And: “We have the cleanest LNG in the world. China wants Canadian LNG to help displace coal. We need to start sending our LNG over to China, to Asia, so we can help reduce global emissions, while advancing economic reconciliation in Canada.”

FNCI report on LNG

First Nations LNG Alliance Newsletter