Expecting the unexpected: Who will take FID next in Canada?

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Canada’s first LNG megaproject is now under construction, and with the consortium already talking about possible expansion, it is fair to say that LNG Canada is changing the natural gas landscape as we know it.

The 19th instalment of the Gastalk webinar series saw presenter Susan Sakmar, Author and visiting Law Professor at the University of Houston Law Centre host a special edition. With leading analyst Dulles Wang, Research Director Americas Gas Research for Wood Mackenzie discussing the main gas and LNG stories of the month, the webinar also welcomed Jae Mather, Co-Founder & Director of Carbon Free Group to give further insights into his white paper: Electrification of British Columbia. If you missed out, we have selected some key highlights below.

In response to the article, Canadian LNG projects seen moving forward, Mr Wang stated that 2019 is slated to be a record year for LNG project sanctions and Wood Mackenzie believe “Woodfibre LNG – a small LNG export project near Vancouver – could reach FID in Canada given the momentum for the Canadian LNG industry following the LNG Canada FID decision last year.”

Whilst numerous challenges are present in the market, such as building the feedgas pipelines between upstream supply and terminals, Wood Mackenzie is still positive about the projects in Canada citing resource advantage, relatively stable cost environment and a shorter distance to Asia as just some of the many benefits. So, what can we expect in 2019? “While Woodfibre may be our most favoured Canadian project to reach FID in 2019, we always say to expect the unexpected. The Canadian gas markets still offer plenty of opportunities, so we are keeping our eye out for the unexpected projects this year.”

The second poll asked to the audience, “Do you expect more Canadian LNG exports to be built besides LNG Canada and Woodfibre?” showed the bullish view that there is definitely optimism in the market for another major LNG export project in Western Canada.

            

Susan Sakmar shifted focus to hear from Jae Mather about the white paper produced by Clean Energy BC – Electrification of British Columbia – which will also be discussed at the Canada Gas and LNG Exhibition and Conference taking place May 21-23 in Vancouver.

Mather kicked off the discussions by stating that “even with the highest standards of energy efficiency and demand reduction; to meet our targets, we will need to greatly expand BC’s electricity generation.”  

When looking closer at the industry it was mentioned that “our greatest potential for GHG emissions prevention is with extensive electrification of natural gas and LNG.”

In the live Q&A session, our speakers addressed some burning audience questions. Take a look below at some which did not have time to be answered in the live webinar –

“What is the likelihood of Goldboro LNG receiving FID in 2019?”

Dulles Wang: Goldboro LNG has been gaining momentum with their offtake agreements, purchase of Ikkuma Resources, First Nation support, etc. but one of the major challenges for Goldboro and other east coast LNG projects is securing pipeline transportation from feedgas to the terminal. Capacity expansion on existing pipelines to connect Western Canada resource to the liquefaction plant will be expensive and New England is chronically constrained at full capacity in the winter. More details on the feedgas transportation strategy will be needed for Goldboro LNG before they reach FID.

“Do you think low Asian spot prices will bring a halt to project FIDs?”

Dulles Wang: While the Asian LNG spot prices have softened to $5/mmbtu in recent weeks, LNG FID decisions hinge more on the forward market view of global LNG supply and demand in the 2020s and beyond.

If you want to hear more about the dynamic Canadian gas market, register here to listen to the full webinar discussions. Attend Canada's only exhibition and conference dedicated to the global gas and LNG industries! Register now to discover incredible insights and market expertise at this year's Canada Gas & LNG Exhibition ↓

Image source: LNG Canada