Economics are right for Canada LNG exports: consultant

24 September 2013 20:12  [Source: ICIS news]

TORONTO (ICIS)--The economics for Canadian exports of liquefied gas (LNG) to Asia are right, given the “huge” global LNG demand growth in coming years to support proposed LNG export projects in British Columbia province, a consultant said on Tuesday.

Bill Gwozd, senior vice president for gas services for consultancy Ziff Energy in Calgary, said that global LNG demand should double by 2020.

“We have low natural gas prices to feed the LNG export projects, and Asia is going to have a high price,” he said. 

In addition, Canada was well-positioned to compete on LNG exports to Asia, given the relatively short distance from its west coast to the region, he said.

Also, quite unlike its US competitors on the Gulf Coast, Canada's LNG exports would not be exposed to the risk of storms or hurricanes, he said.

He predicted that Canadian LNG exports would have a long future, with a life-time of "50 to 100 plus years".

Gwozd added that he did not agree with comments by some in the industry that Canada risked falling behind LNG export competitors in the US or Australia.

Former federal environment minister Jim Prentice has said that there was nothing more urgent to do for Canada than to quickly establish itself as a competitor on LNG markets.

At an industry conference last week, Prentice, now an executive with Toronto-based CIBC Bank, said that Canada needed to act with much greater urgency in permitting and building proposed LNG export projects.

Gwozd also said that Canada’s domestic gas demand would rise as well.

The main drives were Alberta’s oil sands sector, which requires a lot of energy in its production processes. At the same time, Ontario’s would see rising gas demand to replace lost power capacity from closed down coal-fired plants, he said.

Canada’s chemicals producers’ trade group, CIAC, has said that it is not opposed to LNG exports. However, CIAC would like to see the natural gas liquids (NGL) contained in the gas to be made available commercially in Canada.

A number of firms, including Shell and Malaysian state energy major PETRONAS, have put forward plans for LNG export projects in British Columbia province.

By: Stefan Baumgarten
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