InterviewCanada chems don't oppose LNG exports, seek NGL bids

04 September 2013 18:59  [Source: ICIS news]

TORONTO (ICIS)--Canada’s chemical industry is not opposed to proposed large liquefied natural gas (LNG) export projects on the country’s west coast, but it wants to see more transparency on associated natural gas liquids (NGL), a chemical trade group said on Wednesday.

“We would like to see a way in which the liquids are made available commercially,” David Podruzny, vice president of business and economics at Chemistry Industry Association of Canada (CIAC) told ICIS in an interview.

“We would like to see the information on the liquids made available so that commercial transactions can take place to exploit those liquids,” Podruzny said.

“So, rather than export all of the liquids in the natural gas, we would like to see some commercial access to bid for some of those liquids before they are exported,” he said.

Podruzny said that CIAC stressed the need for transparency on liquids in recent comments it made to Canada’s federal energy regulator, the National Energy Board (NEB), which oversees the permitting of LNG projects.

“We brought it to the attention of the regulator that the chemical industry is experiencing tightness in access to ethane [in western Canada], and therefore we would like to see some transparency so that [firms] can engage in commercial transactions to access ethane, or at least to bid for ethane before it is exported,” he said.

But Podruzny said that Canada’s chemical industry is not opposed to natural gas exports from Canada.

“We need to move gas so that we can extract more wet gas from the deposits in western Canada, and thus have the access to those liquids, which is what we require,” he said.

Canada has always exported a large portion of its natural gas production to markets in the US, and as such Canada’s natural gas situation is different from that in the US where some chemical firms have come out in opposition to LNG export projects, he said.

Podruzny added that Canada’s petrochemical industry is highly competitive internationally because it is predominantly based on gas and ethane, rather than oil and naphtha.

At the same time, western Canada’s potential for growth in energy and petrochemicals “is enormous”, especially for shale oil and associated shale gas and liquids.

Podruzny said that a recent geological report even suggested that there could be as much shale gas in Alberta as on the US mainland, opening up the potential for many world-scale polyethylene (PE) and other chemical plants in that province.

“Of course, these things are a bit on the theoretical side, but we as a chemical industry association are excited about the size of the opportunity going forward,” he said.

A number of firms, including Malaysia’s energy and petrochemicals major PETRONAS, have proposed large LNG export projects on the British Columbia coast. Canadian gas producers are looking for new markets as the US shale gas boom has reduced the need for gas imports from Canada.

By: Stefan Baumgarten
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