HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS PETROLEUM NEWS BAKKEN MINING NEWS

Providing coverage of Alaska and northern Canada's oil and gas industry
January 2014

Vol. 19, No. 4 Week of January 26, 2014

Canada untroubled by LNG rivalry

The prospect of Canada competing against itself in the global LNG market has yet to set off alarm bells in the British Columbia or federal governments.

But the topic is about to get tested before Canada’s National Energy Board, which has applications from Oregon LNG and Jordan Cove LNG to import a combined 2.83 billion cubic feet per day from Western Canada as feedstock for their two LNG projects in Oregon.

That comes on top of seven permits approvals by the NEB for domestic LNG operations that represent a total of 14.7 bcf per day of gas supplies, with two more Canadian applications filed for a combined 3.4 bcf per day.

In all, the approvals and applications, which still need final ratification from the Canadian government and corporate sanctioning before they become reality, are close to a staggering 21 bcf per day — 7 bcf per day more than Canada’s current output, almost 10 bcf per day more than the NEB’s forecast for domestic and export consumption in 2015 and 4 bcf per day more than Canada’s peak consumption year in 2007.

However, the LNG applicants, a leading consultant and the British Columbia government are remaining calm in the face of those statistics.

Not even the prospect that Canadian gas could underpin two U.S. LNG operations which would then compete with Canadian proposals for a share of the Pacific-Asia market is causing any anxiety.

The British Columbia government does not believe the two Oregon proposals will affect any of the current LNG projects under way in the province, said a spokeswoman for Natural Gas Development Minister Rich Coleman.

She said British Columbia’s total natural gas potential has been estimated at 2,933 tcf, enough to “support development and LNG export operations for more than 150 years.”

She also said that in approving export applications Canada’s National Energy Board “ensures the quantity of gas does not exceed the amount required to meet domestic demand.”

Oregon LNG CEO Peter Hansen said his project will target “economically stranded” Canadian gas.

“We’re not feeling any pushback from (Canadian regulators or industry) in that regard,” he said.

Geoff Morrison, British Columbia manager with the Canadian Association of Petroleum Producers, said that from the gas producers’ point of view selling gas into new markets is “good” and is a key objective for CAPP member companies at a time when gas sales are at a low ebb.

“We’re in a competitive world and Canada is competing against the U.S. on the supply and export side,” he said.

In a submission to the NEB in support of the Jordan Cove application, the firm of Navigant Consulting said domestic supplies in the U.S. and Canada are “abundant to such a degree” that they will support domestic and export demands, without allowing for the potential of resources in Alaska and Arctic Canada.

“Overall natural gas supply growth in North America continues to be remarkable ... (and) the supply-demand dynamic has the potential to be easily balanced for the foreseeable future, even as natural gas demand grows,” Navigant said.

Canada’s Natural Resources Minister Joe Oliver has given an assurance that the federal government will carefully assess the methods used by the NEB to determine whether the LNG requirements are surplus to Canada’s forecast supplies over the license periods, which mostly cover 25 years.

—Gary Park






Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- http://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.