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LNG horse race includes the north

November 02, 2013

There are a plethora of LNG projects announced and planned throughout the world. BC is coming late to the LNG export game, and the 8 projects announced will be culled by market realities. 

Total Asian demand for natural gas will be about 320 billion cubic meters per year in 2013. Imported LNG supplies about 1/2 the market now. China is upgrading its pipelines for imports and its own natural gas production.

The largest LNG suppliers in the world are Qatar, Malaysia, Indonesia, Australia and Nigeria. North America is not a player in the LNG market, save one small export facility in Nikiski, Alaska.

The BC LNG projects, all based in Kitimat or Prince Rupert,  that have been announced to be built are:

In total the BC projects would add 90 MTPA in capacity making Canada the largest producer in the world. (Qatar produced 77 MTPA in 2010).

Meanwhile, Alaska has hope for $65 B LNG export facility. Russia is constructing a 16.5 MTPA LNG facility on the Yamal peninsula. Russia aims to produce 35-40 MTPA of LNG by 2020. The state of Oregon has two LNG projects under consideration. 



A number of jurisdictions with natural gas reserves have gone LNG crazy. There are simply not enough Asian consumers in the world to take up the LNG capacity that has been announced by BC, Australia, Russia, the US….. The rapidly increasing LNG capacity worldwide suggests Mr.Market will act to reduce prices for consumers in Japan, Korea and China.

It is hard to see how many of the northern LNG projects will come to fruition.