Canada is a “late entrant” to the global liquefied natural gas market and the next several years will be critical to the development of the Canadian LNG industry, according to a new report released by the country’s National Energy Board (NEB).
The report, titled Canada’s Role in the Global LNG Market, looks at changing LNG market dynamics, including lower prices and fierce competition.
This has created uncertainty among all LNG projects, including those proposed in Canada, the report said.
Global LNG demand has been growing, especially in Asia and parts of Europe. Most near to medium-term increases in global LNG supply to meet this demand will come from capacity already under construction in Australia and the U.S.
The report notes that Canada produces more natural gas than it needs to meet domestic demand.
“While the United States has been the traditional market for surplus Canadian gas, rapidly increasing shale gas production in the U.S. has reduced this demand and spurred interest in developing Canadian LNG exports,” it said.
Since 2010, the NEB has received 43 LNG export license applications, with 35 of them receiving approval. There are 24 planned projects – 18 based along the British Columbia (B.C.) Coast and the remaining in Quebec and the Maritimes.
Woodfibre LNG near Squamish, B.C., is the only Canadian project where the company that has reached a final investment decision to proceed.
Woodfibre received conditional federal approval in March 2016 and was granted a 40-year LNG export license by the NEB on 9 June 2017.
The Pacific Northwest LNG project near Prince Rupert, B.C., received conditional federal approval in September 2016 and a 40-year LNG export license from the NEB on 21 December 2016, but the project still requires a final investment decision by the company. Four other projects have received major regulatory approvals.
“In recent years, there have been a number of LNG projects proposed in Canada, and significant investments have been made into their planning and approval. Despite this, Canada has yet to emerge as an active participant in the increasingly competitive global LNG market, but proponents are still actively working on projects on both coasts,” said Shelley Milutinovic, Chief Economist at the NEB.