Canada is a late entrant to the global LNG market and the next several years will be critical to the development of the Canadian LNG industry according to a new report released by the energy information and analysis unit of the National Energy Board (NEB) of Canada.
The report, titled Canada’s Role in the Global LNG Market, looks at changing LNG market dynamics, including lower prices and fierce competition. This has created uncertainty among all LNG projects, including those proposed in Canada.
The National Energy Board is an independent federal regulator of several parts of Canada’s energy industry. Since 2010 the National Energy Board of Canada has received 43 LNG export license applications, with 35 of them receiving approval. There are 24 planned projects – 18 based along the British Columbia (B.C.) Coast and the remaining in Quebec and the Maritimes.
Woodfibre LNG near Squamish, B.C., is the only Canadian project where the company that has reached a final investment decision to proceed. Woodfibre received conditional federal approval in March 2016 and was granted a 40-year LNG export license by the NEB on 9 June 2017. The Pacific Northwest LNG project near Prince Rupert, B.C., received conditional federal approval in September 2016 and a 40-year LNG export license from the NEB on 21 December 2016, but the project still requires a final investment decision by the company. Four other projects have received major regulatory approvals.
Canada’s Role in the Global LNG Market Energy Market Assessment July 2017 report can be found in PDF format here .
The INPEX-operated Ichthys LNG Project’s floating production, storage and offloading (FPSO) facility–Ichthys Venturer–safely sailed away yesterday evening from waters near its construction site in Okpo, South Korea en route to Australia.
The 336 meter long offshore facility began the 5,600 kilometer voyage that will take approximately one month to complete from South Korea the Browse Basin, 220 kilometers off the north coast of Western Australia.
“The sail away of the massive Ichthys Venturer marks another significant stride forward for the Ichthys LNG Project,” Mr Louis Bon, Managing Director Ichthys Project stated.
When operational the FPSO will process and store condensate delivered from the Ichthys LNG Project’s central processing facility before periodically offloading this condensate to export carrier vessels.
U.S. President Donald Trump spoke with reporters Wednesday on board Air Force One to France for the President's meeting with French President Emmanuel Macron. Below are excerpts of the conversation as transcribed and shared by the White House.
And, by the way, I only want to make great deals with Russia. Remember this, I have built up -- we’re getting $57 billion more for the military. Hillary was going to cut the military. I’m a tremendous fracker, coal, natural gas, alternate energy, wind – everything, right? But I’m going to produce much much more energy than anyone else who was ever running for office. Ever. We’re going to have clean coal, and Hillary wasn’t. Hillary was going to stop fracking. She was going to stop coal totally. Hey, in West Virginia I beat her by 42 points. Remember, she went and sat with the miners and they said get the hell out of here. So, I was going to -- if Hillary got in, your energy prices right now would be double. You’d be doing no fracking. You’d be doing practically no fossil fuels.
Now, why does that affect Russia? Because Russia makes its money through selling of oil, and we’ve got underneath us more oil than anybody, and nobody knew it until five years ago. And I want to use it. And I don’t want that taken away by the Paris Accord. I don’t want them to say all of that wealth that the United States has under its feet, but that China doesn’t have and that other countries don’t have, we can’t use. So now we no longer have the advantage. We have a tremendous advantage. We have more natural resources under our feet than any other country. That’s a pretty big statement. Ten years ago, five years ago even, you couldn’t make that statement. We’re blessed. I don’t want to give it up. I don’t want to say oh, okay, we won’t use it. But think of it. So, if Hillary is there, you’re going to have a far less amount of fuel. Therefore, energy prices will be much, much higher. That’s great for Russia.
So, the next time I’m with Putin, I’m going to ask him: who were you really for? Because I can’t believe that he would have been for me. Me. Strong military, strong borders -- but he cares less about the borders -- but strong military, tremendous. We’re going to be an exporter of fuel this year. We’re going to be exporting. What was the first thing I signed when I got in? The Keystone Pipeline, and the Keystone Pipeline goes from Canada all the way through our country right into the Gulf, and the ships are there to take it all over and compete with Russia.
The first thing I signed, the first day, was the Keystone Pipeline. That first * was the Keystone and the Dakota Access Pipeline -- also Dakota Access. Now, what does that mean? Dakota Access takes it to the Pacific. Who do they compete with? Russia. Hillary would have never signed -- that was with the reservation -- she would have never signed it. I was given great credit for that one. That was a tough one. First day. It’s also 48,000 jobs between both of them. The other one I signed, that was the Keystone. That was dead. That was dead for two years. It was never going to happen. I revived it on day one. You know, you’ll check, please check it. I have to be exactly accurate. They’ll say, oh I wasn’t totally accurate. But that goes to the Gulf, right? Competes with Russia.
So now oil is getting to be record low -- and gas -- because we’re producing so much. That means Russia -- and you know Russia is having a little hard time because it has come down so much.
The United States will account for 40% of the world’s extra gas production by 2022 thanks to the growth in its domestic shale industry. This according to the new report from the IEA Market Report Series: Gas 2017 . By 2022 the IEA estimates that the United States will be on course to challenge Australia and Qatar for global leadership among LNG exporters.
By 2022, U.S. production will be 890 bcm, or more than a fifth of global gas output according to the IEA’s analysis and five-year forecast on natural gas. Production from the Marcellus region in the U.S. will increase by 45% between 2016 and 2022. The report noted producers will increase efficiency and produce more gas with fewer rigs. US domestic demand for gas will grow because of higher consumption from the industrial sector. More than half of the U.S. production increase will be used for LNG exports according to the report.
Global gas demand is expected to grow by 1.6% a year for the next five years, with consumption reaching almost 4,000 billion cubic meters (bcm) by 2022, up from 3,630 bcm in 2016. China will account for 40% of this growth.
“The US shale revolution shows no sign of running out of steam and its effects are now amplified by a second revolution of rising LNG supplies,” said Dr Fatih Birol, the IEA’s Executive Director. “Also, the rising number of LNG consuming countries, from 15 in 2005 to 39 this year, shows that LNG attracts many new customers, especially in the emerging world. However, whether these countries remain long-term consumers or opportunistic buyers will depend on price competition.”
The ample availability of LNG is creating new competition with pipeline gas supplies which could benefit consumers. The competition is loosening pricing and contractual rigidities that have traditionally characterized long-distance gas trade. The change will be accelerated by the expansion of US exports, which are not tied to any destination and will play a major role in increasing the liquidity and flexibility of LNG trade according to the report.
Europe could see growing competition between LNG imports and pipeline gas as domestic production declines creating extra uncertainty on the sources of future supply. The recent standoff involving Qatar, which supplies about a third of the world’s LNG, and neighboring countries has also underscored potential risks to gas supply security. “Even in a well-supplied market, recent events remind us that gas security remains a critical issue.” said Dr Birol.
The new Market Report Series: Gas 2017 is available for purchase here .