Home NEWS There’s still hope for liquefied natural gas on the West Coast – Business

There’s still hope for liquefied natural gas on the West Coast – Business

6 min read
0
54

Sponsored links

The once sky-high aspirations to develop a liquefied natural gas (LNG) industry on Canada’s West Coast have crashed to the ground, but experts say the window of opportunity has yet to close as demand for the resource continues to rise around the globe.

After several project delays and cancellations, the LNG industry has struggled to take off in British Columbia. Meanwhile, the sector is blossoming in the United States as natural gas pipelines and LNG facilities are constructed.

“Today, we export LNG to 27 nations on five continents,” said U.S. Secretary of Energy Rick Perry in a speech last week at CERAWeek, the global energy conference, in Texas.

Some of the natural gas exported from the United States is produced in Canada and transported south by pipelines. 

Royal Dutch Shell chief executive Ben van Beurden talks LNG prospects at CERAWeek0:30

LNG exports from the U.S. were about 100 million cubic feet per day at the start of 2016 and have grown to about three billion cubic feet per day, according to the U.S. Energy Information Agency. The firm predicts exports will rise to nearly 10 billion cubic feet by the end of 2019.

Canada’s natural gas industry is desperate for even a fraction of that export capacity north of the border. Natural gas prices in Alberta remain depressed without domestic demand growth and insufficient capacity to export.

Former B.C. premier Christy Clark pitched the burgeoning industry as a massive wealth creator for the province, including a pledge in the 2013 throne speech to build a $100 billion prosperity fund from LNG revenues.

But all is not lost on the West Coast, as some proposed LNG export projects are still in development. The largest is LNG Canada, a consortium led by Shell, which is working toward making a final investment decision on the $40 billion project in Kitimat, B.C. Last month, the consortium announced it was short-listing two major international engineering and construction groups for the design, procurement and construction of the LNG plant. 

LNG plants proposed January 2018

Shell is the world’s largest LNG company after acquiring BG Group in 2016 and the company’s chief executive believes the sector has a bright future.

“LNG demand has been growing at four times the rate of oil demand and I think it will continue to do so for many years, if not decades to come,” said Shell CEO Ben van Beurden, while at CERAWeek. “Investment has dried up a bit. I think this is probably not a bad time to start considering again investment in supply of new LNG projects and I suppose if we don’t do that, we’ll see a bit of a crunch coming in the early [2020s].”

The main challenge facing West Coast LNG project proposals is their cost, according to Enbridge CEO Al Monaco. In an interview with CBC News at CERAWeek, the chief executive said the projects need to become competitive with building a similar project in the Gulf Coast of the U.S. 

Enbridge Al Monaco

Enbridge CEO Al Monaco says costs have to come down for LNG projects to become a reality. (Kyle Bakx/CBC)

“What we need to do is focus on getting the costs down for building pipelines and building LNG facilities, that’s what we got to do next,” he said. “Industry can work on cost structure within pipelines and LNG. Governments can facilitate by ensuring a smooth regulatory process and support for natural resource development.

“It’s a fantastic opportunity.”

LNG export facilities take several years to construct, so companies would need to start construction soon in order to be up and running by 2021 or 2022, say experts.

Sponsored links
Source link

Load More Related Articles
Load More In NEWS
Comments are closed.

Check Also

South Korea says US drills suspended to aid talks with North

South Korea on Tuesday presented a united front with the United States on a decision to ca…