Five Things That Have Changed for Natural Gas in the Northwest Territories

Menzie McEachern's picture
Menzie McEachern, Director, Mineral and Petroleum Resources, Department of Industry, Tourism and Investment, Government of Northwest Territories
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As Canada’s Northwest Territories once again returns to the table in discussions about natural gas, there may be those who think they already know the story. The territory, after all, has tried to get its resources to market before.  
So what’s different this time? We’ve compiled five key factors that have changed the circumstances in a big way.

1. Destination: Asia

As Asian economies transform and populations grow, demand for natural gas in Asia, and China, in particular, is expected to more than double from 21 trillion cubic feet (tcf) next year to 51 tcf in 2050. The Mackenzie Delta’s onshore gas fields are closer to Asian markets than you might think. The “over the top” shipping route from Tuktoyaktuk, NWT to Tokyo is 3,836 nautical miles.  It’s 464 nautical miles closer than the route from Vancouver to Tokyo. The distance from Yamal to Tokyo is over 5,150 nautical miles. With as much as a two- or three-day advantage, depending on the season, Mackenzie Delta gas is well-positioned to meet the demands of an Asian LNG market. 

2. Gas vs. Coal

Coal has long been the predominant energy source in Asia — something that is increasingly being recognized as unsustainable. Instead, natural gas is taking over as the friendlier, alternative energy that will fuel the region’s economy into the future while curtailing environmental impacts and concerns about climate change. Demand for natural gas is growing – exponentially.
 
3. New Technology 

Tankers full of, and fueled by, LNG are already navigating the Arctic from Russia. These new tankers are cutting-edge – and with multi-hull technology, icebreaking capabilities and enhanced navigational capabilities, they are easily able to navigate two metres of ice or more during a journey. Meanwhile, floating Liquefied Natural Gas (LNG) facilities offer a means to liquefy and put gas in ships – and the waters of the Mackenzie Delta offer an excellent loading point for ships destined for Asia.  

4. Ships vs. Pipelines

Floating LNG developments do not require the same mega-investment as traditional onshore pipeline projects. Construction is modular. It can be floated into place in self-contained units and assembled onsite. When you consider the enormous cost of remote pipeline construction, it’s a game-changer.  

5. Shipping Conditions 

Arctic sea ice cover has diminished significantly since 1985 and with up to 55 days of navigable conditions already, the window is improving for shippers working their way to the Asia-Pacific corridor. With younger ice generally thinner and easier for icebreakers to manage, expanded shipping seasons mean the resources of the Mackenzie Delta are closer to viable markets than ever before.