Canada saw significant LNG progress in 2015: What next in 2016?

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2015 saw significant steps for major Canadian LNG projects in taking Final Investment Decisions (FIDs) and winning vital environmental approval. For example, Canada’s Environment Ministry approved Shell’s LNG Canada project at Kitimat, BC contingent on the project meeting 50 environmental, social and operational conditions. Federal Environment Minister Leona Aglukkaq took the crucial step in granting Shell the licence by justification of long-term benefits to Canada in terms of massive job and revenue creation. In addition, the province of British Columbia issued its own environmental certificate stressing that ongoing consultation with aboriginal peoples and local communities is key. Another major step forward for the burgeoning Canadian LNG industry was taken by Petronas. The Malaysian energy giant’s Pacific Northwest LNG project received the conditional FID from the Petronas Board setting in motion the next phase of the $36-billion project. The recent change in Canada’s federal government led by new Prime Minister Trudeau will be critical in fast-tracking or hampering the country’s LNG industry.

Canada’s potential customers. Given the massive scale and long-term vision required to execute a successful, global LNG project, a key component to underpin a final-investment decision (FID) is securing customers. Canada’s logical and traditional trading partner, at least on the West Coast, is the energy-hungry Asian market with established gas-procuring countries such as Japan and rapid growth economies like China eager to diversify reliable sources of energy. Another growing procurement player is the Philippines where regasification facilities and natural gas infrastructure is a key focus of the country’s energy agenda and companies such as First Gen Corporation are leading the way having completed FEED studies.

Skilled workforce? Fundamental to the industry's future success. The potential growth for the new Canada LNG industry is phenomenal. But with great scope for rewards comes great exposure to risk. Perhaps the most fundamental part of a successful LNG project - after access to abundant resource - is having the skilled workforce in place to execute all phases of the LNG lifecycle. Just ask Woodside Energy CEO, Peter Coleman, who recently cited skilled workers as the critical driver to project success in Australia – and a lack of project-ready workforce can hit the bottom-line hard. Will the current downturn in Canada’s traditional energy heartland bring skilled workers from the oilsands over to new LNG projects such as LNG Canada, PNW LNG and Woodfibre LNG?

How is the Canadian LNG industry moving forward? Leave your comments below.

Article by Tom Quinn, Senior Conference Producer, Canada LNG Export

The 4th annual Canada LNG Export Conference, taking place in Vancouver in May, will focus on key procurement and investment issues amongst many others to offer an insight into the future of the growing Canadian LNG industry. For further information on how you can get involved please email jcmontoya@dmgevents.com.

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