Canada a ‘late entrant’ to global liquefied natural gas market, says new NEB report
Canada is a late entrant to the global liquefied natural gas (LNG) market and the next several years will be critical to the development of the Canadian LNG industry, according to a new report released by the energy information and analysis unit of the National Energy Board (NEB).
The report, titled Canada’s Role in the Global LNG Market, looks at changing LNG market dynamics, including lower prices and fierce competition. This has created uncertainty among all LNG projects, including those proposed in Canada.
LNG is natural gas that is cooled to about -160°C in order to make it a liquid. This allows it to be loaded onto specialized tankers and exported overseas.
Global LNG demand has been growing, especially in Asia and parts of Europe. Most near to medium-term increases in global LNG supply to meet this demand will come from capacity already under construction in Australia and the U.S.
Canada produces more natural gas than it needs to meet domestic demand. While the United States has been the traditional market for surplus Canadian gas, rapidly increasing shale gas production in the U.S. has reduced this demand and spurred interest in developing Canadian LNG exports.
Since 2010, the NEB has received 43 LNG export licence applications, with 35 of them receiving approval. There are 24 planned projects – 18 based along the British Columbia (B.C.) Coast and the remaining in Quebec and the Maritimes.
Woodfibre LNG near Squamish, B.C., is the only Canadian project where the company that has reached a final investment decision to proceed. Woodfibre received conditional federal approval in March 2016 and was granted a 40-year LNG export licence by the NEB on 9 June 2017. The Pacific Northwest LNG project near Prince Rupert, B.C., received conditional federal approval in September 2016 and a 40-year LNG export licence from the NEB on 21 December 2016, but the project still requires a final investment decision by the company. Four other projects have received major regulatory approvals.
The National Energy Board is an independent federal regulator of several parts of Canada’s energy industry. It regulates pipelines, energy development and trade in the public interest with safety as its primary concern. For more information on the NEB and its mandate, please visit www.neb-one.gc.ca