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LNG west coast export hype

December 13, 2012

An astounding number of large LNG projects have taken shape for the west coast of BC. If even half of the projects get built Kitimat and Prince Rupert would be booming.

The BC Premier Christy Clark likens the LNG export potential to Alberta’s oil sands. She has sights set on opening three LNG operations in B.C. by 2020, with the first up and running by 2015 (please note BC provincial election is coming up in May-2013). Clark said she’s pushing to ensure B.C. enters the LNG race ahead of other countries, especially the United States.

BC has lots of natural gas, particularly in the Liard and Monteney basins. Indeed, 97% of Canada’s supply comes from western Canada and its expected to grow from 15.3 Bcf/d in 2011 to 17.3 Bcf/d by 2045.

The LNG projects on tap for northern BC are:

The south-central Alaska LNG project envisioned by BP PLC, Exxon Mobil Corp., ConocoPhillips Co. and TransCanada Corp. is huge in scale. With a price tag of $45-billion to $65-billion-plus (U.S.), the Alaska project cost includes both a pipeline from the North Slope and LNG port facility costs. The project would use 1.7 million tons of steel, take 15,000 people to build and load three billion to 3.5 billion cubic feet of natural gas a day on to ships bound for Asia. Although it has already seen $700-million in planning expenditures, the Alaska project is just getting started. It will take eight to 10 years to design and build.

The small Kenai Liquefied Natural Gas (LNG) Plant began operating in 1969, after the nearby North Cook Inlet Gas Field was discovered in 1962. Nearly all LNG produced at the plant has been sold via contracts with two Japanese utilities. 



The high Asian prices for natural gas, about 5 times the North American price, make LNG exports exceedingly attractive. Alas, no investment decisions have been made, just plans so far. Perhaps soon some of the hype will turn into investments and jobs.