How does Canada's burgeoning LNG industry measure up to its ambitions?
'But up until now, the bulk of LNG development has actually been more by large international players like Shell,' said Ian Archer, associate director, North America Natural Gas at S&P Global Inc.
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The LNG Canada venture is jointly owned by five international oil and gas companies: British multinational Shell PLC (40 per cent), Malaysia's state-owned Petronas (25 per cent), state-owned PetroChina Company Ltd. (15 per cent), Japan's publicly traded Mitsubishi Corp. (15 per cent) and South Korea's state-owned Korea Gas Corp., or Kogas (five per cent).
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Located about 650 kilometers northwest of Vancouver, the LNG Canada Kitimat terminal represents the 'largest single private sector investment in the history of the country,' according to the federal government.
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The project's $40 billion price tag includes $18 billion for the Kitimat facility and the $14.5 billion for the Coastal GasLink pipeline, which is operated by Calgary-based TC Energy Corp. and transports natural gas from Dawson Creek in the B.C. interior to Kitimat.
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Canada is currently the world's fifth-largest producer of natural gas, according to the Canadian Association of Petroleum Producers (CAPP) and the fourth-largest exporter, according to Reuters.
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Canada has some of the 'largest and most productive' natural gas deposits in the world, according to Natural Resources Canada, with about 44 trillion cubic metres (1,566 trillion cubic feet) in marketable natural gas resources. At the current rate of production, that's about 300 years' worth of natural gas.
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Archer said the biggest growing markets for natural gas are China, India and a range of smaller countries such as the Philippines and Vietnam. Europe is another big market as several countries look to transition away from importing gas from Russia due to the war in Ukraine.
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'But most of the growth is expected to be in Asia and that's why West Coast LNG looks particularly appealing, because the market is literally just across the Pacific,' said Archer.
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Archer said LNG is a niche but growing market, and a globally competitive one. But when it comes to geography, Canada has a big advantage over the United States. It takes about 10 shipping days to reach Asia from Canada's west coast, compared to 20 days for LNG shipments coming from the U.S. Gulf Coast.
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B.C. Premier David Eby said the LNG Canada project will increase Canada's gross domestic product (GDP) by 0.4 per cent, while TC Energy chief executive Francois Poirier told the Financial Post earlier this year that LNG shipments could boost Canada's GDP by up to $75 billion annually.
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LNG Canada is currently considering expanding the Kitimat facility, which would double its export capacity from 14 million to 28 million tonnes per year.
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Cedar LNG, a floating liquefaction and export facility toted as the world's first Indigenous majority-owned LNG project, is currently under construction in Kitimat and expected be in service in late 2028. The project is co-owned by the Haisla Nation and Pembina Pipeline Corp.
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