Much has changed in the North American liquefied natural gas (LNG) market in the past decade. Throughout the early to mid-2000’s, concerns over decreasing conventional supplies of domestic natural gas led to bullish predictions about future LNG demand in North America, resulting in an investment boom to build new LNG import facilities.
Around 2008, dramatic changes in the market on account of surging U.S. unconventional natural gas production (mostly from shale gas) started to change the outlook for LNG imports. Natural gas production increased, North American prices fell significantly, and the expected need for imported LNG was dampened.
As unconventional gas production increases, the U.S. is becoming increasingly self-sufficient with respect to natural gas. Pipeline exports from Canada to the U.S. are decreasing. With ample unconventional resources, industry is shifting its focus from importing LNG into North America to exporting LNG from North America. The export of LNG could facilitate Canadian natural gas production growth and result in significant investment, jobs and economic growth.
There may be a short window of opportunity for Canada to capitalize on its LNG export potential, as there is intense competition around the world for these investments. The Government of Canada is working closely with British Columbia and other provinces to create conditions supporting the development of an LNG industry in Canada.
Canadian LNG Projects
As the North American natural gas industry moves away from importing LNG, Canada and the United States have a considerable surplus of regassification capacity. In 2013, Canadian imports of LNG represented 10% of capacity and U.S. imports of LNG represented 1% of US regassification capacity.
Canada does not have any operational LNG export facilities. However, as of September 2014, seventeen proposed LNG export facilities in Canada have entered the regulatory review process – sixteen in British Columbia and one in Nova Scotia. Canada’s only operational LNG terminal is Canaport LNG’s regassification terminal located in Saint John, New Brunswick.
Canadian LNG Import and Proposed Export Facilities (September 2014)
|Canaport LNG||Saint John, New Brunswick|
|Douglas Channel LNG||Kitimat, British Columbia|
|Kitimat LNG||Kitimat, British Columbia|
|LNG Canada||Kitimat, British Columbia|
|Pacific Northwest LNG||Prince Rupert, British Columbia|
|Prince Rupert LNG||Prince Rupert, British Columbia|
|Goldboro LNG||Guysborough County, Nova Scotia|
|Woodfibre LNG||Squamish, British Columbia|
|WCC LNG||Kitimat or Prince Rupert, British Columbia|
|Triton LNG||Kitimat or Prince Rupert, British Columbia|
|Aurora LNG||Prince Rupert, British Columbia|
|Kitsault Energy Project||Kitsault, British Columbia|
|WesPac Marine Terminal||Delta, British Columbia|
|Steelhead LNG||To be determined, British Columbia|
|Grassy Point LNG||Prince Rupert, British Columbia|
|Discovery LNG||Campbell River, British Columbia|
|Cedar LNG||Kitimat, British Columbia|
|Orca LNG||Prince Rupert, British Columbia|
While the ongoing operation of LNG terminals generally falls under provincial regulation, most LNG terminal proposals require both federal and provincial environmental assessments and permits.
Most of the proposed LNG facilities require new pipelines or the expansion of existing pipelines. Intra-provincial pipelines are provincially regulated, while pipelines that cross a provincial or international border are federally regulated. For more information on pipelines, please see Frequently Asked Questions (FAQs) Concerning Federally-Regulated Petroleum Pipelines in Canada.
A permit from the National Energy Board (NEB), Canada’s federal energy regulator, is required to export LNG from Canada. The NEB reviews export licence applications to ensure that the proposed volume of gas to be exported is surplus to Canadian requirements. As of September 2014, the NEB had issued long-term export licences to the proponents of Douglas Channel LNG, Kitimat LNG, LNG Canada, WCC LNG, Prince Rupert LNG, Pacific NorthWest LNG and Woodfibre LNG. More information on export licences is available at the NEB's website.
These websites provide useful background information on LNG and LNG regulatory processes in Canada.
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