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LNG vital to Canada’s natural gas future
By GARY PARK For Petroleum News
LNG export projects could pump C$940 billion into Canada’s economy over the next 23 years, create 130,000 jobs and see C$140 billion in capital investment in British Columbia alone, the Conference Board of Canada has estimated.
And calculations are based on only 60 percent of British Columbia’s LNG potential being realized.
But a new report by the board also makes clear that those dazzling numbers do not represent a net gain for Canada’s natural gas industry, which it said faces a tough decade ahead, marked by depressed prices, a continuing plunge in exports to the United States and lower production.
The board forecasts that net exports to the U.S. will drop to 1 trillion cubic feet a year by 2022, or less than one-third of what was shipped south in 2007, largely resulting from rapid development of shale gas deposits.
The outlook for LNG, which British Columbia Premier Christy Clark believes could put her province on the same energy footing as Alberta’s oil sands, is the only hope of recapturing a chunk of the lost gas exports.
If all of the LNG terminals proposed for British Columbia get built, Canada would become the world’s second largest LNG supplier after Qatar, with export capacity reaching 20 million metric tons a year, the report said.
Two challenges “British Columbia faces the challenge of developing on two fronts: unconventional shale gas production and infrastructure to support LNG exports. Regulatory and fiscal measures that enable development will be keys to success,” the board said.
“This level of investment will require a careful and consistent regulatory approach to support the long-term economic viability of the facilities to be constructed while at the same time ensuring that the natural environment is protected and all stakeholders have the opportunity to present their views.”
The report projected that Canadian gas production will decline from 5.3 tcf a year in 2012 to 4.8 tcf a year in 2019, but British Columbia will benefit from its vast untapped gas resources, while Alberta and Saskatchewan production volumes will go into decline.
The board said it does not assume that all of the LNG projects now on the table will proceed, but the future of Canada’s gas industry “depends critically on these upstream investments being made. Conventional natural gas has been the mainstay of the industry for decades, but is now in decline.”
It forecasts that the demand for British Columbia LNG should see gas demand grow by 1 tcf a year, offsetting the decline in exports through existing pipelines to the United States.
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