IEA puts dampener on Canada’s LNG prospects

IEA puts dampener on Canada’s LNG prospects

Vancouver: The prospects for Canada’s liquefied natural gas (LNG) industry may be less bright than previously thought, according to the International Energy Agency.

The Paris-based IEA, an autonomous intergovernmental organisation, said on Tuesday that the western province of British Columbia was probably over-reaching with three LNG projects in the works, aiming for 2020 completions.

It said that weakened demand for LNG from Asia was the X Factor, an unexpected development that would spoil many companies’ projections.

And even though Canada’s LNG projects would be closer to Asia than those in the US, the Canadians’ would suffer from higher capital costs; plus their remote location adds to the investment bill.

The US’s LNG terminals under construction are all brownfield sites, often just repurposing existing facilties to accommodate LNG requirements.

By contrast, all but one of the proposed Canadian plants are greenfield units resulting in greater capital costs.

Additionally, they also follow the traditional integrated upstream model whereby Canada would build dedicated pipelines to connect LNG plants on the coast with inland gas fields in remote areas.

Only last Thursday the Canadian authorities approved a pipeline to link some of the country’s natural gas fields to a mooted LNG export facility, the Pacific NorthWest LNG terminal, a planned $11.4-billion terminal near Prince Rupert.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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