Canadian LNG Import and Export Projects Update

Context

Much has changed in the North American LNG market in the past few years.  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 LNG was dampened.  The future of LNG imports in North America went from bright to uncertain. 

In Canada, most of the proposed projects were either cancelled or suspended on account of:

  1. Difficulties securing long-term supply commitments,
  2. Concerns over existing excess re-gasification capacity in North America, and
  3. The prospects for domestic shale gas as a new long term source of natural gas.

Currently, the United States has a considerable surplus of re-gasification capacity.  For example, between January and March 2009, the total unutilized capacity was 91%.  This figure is only slightly lower for the same time period in 2010.  Most of this excess re-gasification capacity is located in the U.S. Gulf of Mexico region.

Canadian LNG Projects

The map below displays the locations of all the LNG import and export facilities in Canada (e.g. operational, approved, suspended and cancelled facilities).

Map of Canada indicating the locations of all the LNG import and export facilities. There are 3 facilities in B.C, 3 in Québec, and 3 in Atlantic Canada. Please see the table below for more information on each location.

Canadian LNG Projects

Project

Location

Status

Start Date

Initial Capacity

1. Canaport LNG New Brunswick Operational June 2009 1.0 Bcf/d
2. Kitimat LNG (proposed export terminal) British Columbia Pending Construction (approval obtained) 2014 (expected start-up) 0.7 Bcf/d
3. Rabaska LNG Québec Suspended (approval obtained) N/A N/A
4. Cacouna LNG Québec Suspended (approval obtained) N/A N/A
5. Grassy Point Newfoundland Suspended N/A N/A
6. Keltic/Maple LNG Nova Scotia Suspended N/A N/A
7. Énergie Grand-Anse Québec Suspended N/A N/A
8. Westpac LNG British Columbia Cancelled N/A N/A
9. Teekay/Merrill Lynch Export British Columbia Cancelled N/A N/A
TOTAL CANADIAN IMPORT CAPACITY 1.0 Bcf/d

At present, Canaport LNG’s receiving and re-gasification terminal at Saint John, New Brunswick is Canada’s only operational LNG terminal.

Picture of a LNG tanker at the Canaport LNG terminal in Saint John, New Brunswick
Source: Canaport LNG

One of the proposed LNG terminals that is gaining traction in Canada is Kitimat LNG Inc.’s export terminal near the Port of Kitimat, British Columbia. 

Originally slated to be an LNG import facility, in 2008 Kitimat reversed its proposal to an LNG export facility.  This move reflected the increased optimism over new shale gas developments in north eastern B.C. and North America more broadly, as well as the expectation that natural gas prices in Asia would continue to exceed those in B.C.  If realized, the project could further connect the North American gas market with the Asia Pacific market. 

Useful Links

These websites provide useful background information on LNG and LNG regulatory processes in Canada.