Canada may have missed its chance to become an important player on the global liquefied natural gas market unless it changes its regulatory regime to make building LNG plants easier.
This is the opinion of the former head of the International Energy Agency, Maria van den Hoeven, who spoke to Bloomberg. Competition in the LNG industry is intensifying quickly, Van den Hoeven said, noting the unique regulatory challenges that Canada puts in the way of new energy projects, which may deprive it of a place at the table of the big players in the LNG field.
Canada’s first liquefied natural gas project, aptly named LNG Canada, is currently in the early stages of construction after the consortium behind it made the final investment decision last October.
This is only the second LNG project in Canada after the ill-fated Pacific NorthWest project was cancelled by Malaysia’s Petronas in 2017. At the time, the company cited low gas prices for its decision to shelve Pacific NorthWest. At $27.1 billion, the price tag of the project was simply too big for the company.
Yet now, things are looking up. Petronas is a 25-percent partner in the LNG Canada consortium, which is led by Shell (40 percent), and PetroChina and Mitsubishi (15% each). South Korea’s Kogas is the smallest partner, with a 5-percent stake.
The LNG Canada plant will cost an estimated $31 billion and is expected to become operational before 2025. It will initially have two liquefaction trains, each with a capacity of 6.5 million tons of LNG with the prospect of adding another two trains at a later stage, bringing the total capacity of the facility in Kitimat, in northern British Columbia, to as much as 26 million tons annually.
Van den Hoeven admitted she was impressed with LNG Canada, but noted that Canada needs more than one export terminal given the growing demand for LNG on a global scale. And for that, Canada needs to make building these terminals easier.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.