In light of Canada's opportunity to export its natural gas to Asian markets, we asked Robert Simmons, Managing Director - Southeast Asia and Oceania at Alberta Singapore Office, to discuss Canada's gas sector and how the country is developing a competitive LNG export industry taking into consideration Asian buyers' needs and rivals projects developed in Australia, Qatar and the US.
Gastech News: What is the strategic importance of the Canadian gas sector?
Robert Simmons: Natural gas is very important to Canada and Canada has a lot of it, particularly in Western Canada – Alberta and British Columbia. Canada has a long history of exporting gas to the United States and there is significant infrastructure in terms of pipelines on the North American continent and in Alberta in particular. Natural resources are (obviously) very important to Canada and the development of gas reserves and the export of gas is something that Canada is used to and it is very interested in developing.
Gastech News: What is Canada’s competitive edge over top LNG suppliers?
Robert Simmons: Number one is the significant gas reserves in Canada and when you talk about LNG in Asia obviously it is the Western Canadian story that is important and the projects that are planned for the west coast of Canada. There are significant gas reserves in BC that are available for export through LNG projects as well as the existing reserves across the mountains in Alberta so that is an advantage.
The fact that Canada has many decades of experience in developing oil and gas means that there is significant expertise in terms of the number of companies that are involved in upstream development of and distribution of gas, environmentally responsible companies that are well positioned to actually deliver on building the infrastructure for the LNG plants so that is a strategic advantage as well.
The one (advantage) that people talk about a lot is the fact that shipping routes from the west coast of Canada to Asia are significantly shorter than the routes from gulf coast to Asia and finally I think one of the other advantages in the LNG sector is Canada’s colder climate which means that LNG plants can operate more efficiently.
Gastech News: What are the unique opportunities for the LNG industry in Asia?
Robert Simmons: Well that is an interesting question because you are talking about LNG in Asia. The shifts towards gas and natural gas and the need for LNG is very important from an Asian perspective and going back to what I said about Canada, Canada and Alberta has a lot of experience in working with gas so Canadian companies are well positioned to participate in the development of the gas infrastructure in Asia. It is not just about shipping LNG but also distributing gas and downstream development of the gas utilisation sector across Asia.
Gastech News: What are the key challenges in exporting LNG to Asia?
Robert Simmons: There are many different models on how projects are being developed in North America and Africa and the challenge is obviously, building the project which involves lining up investors and arranging financing etc. For a project to be commercially viable it is important for project developers in North America to convince Asian buyers that their projects will have a long term predictable supply of natural gas. It takes time to put projects together, each project is different, the economics are different, but the challenge is getting from the development stage in to delivery of the LNG.
Gastech News: How will the Asian gas industry develop in the next two years?
Robert Simmons: I think we are moving in to a period of time when gas will become more and more important perhaps displacing coal in terms of power generation. Over the next decade there will be a rapid growth in the utilisation of gas in Asia and a larger number of countries that will be importing LNG. This will require a significant investment in gas infrastructure around the region and particularly in South East Asia to help deliver gas to more and more customers. Canadian companies are well positioned to participate in the development of the gas sector in Asia.
The Canada LNG Pavilion at Gastech is supported by the Government of Canada, British Columbia Government, Alberta Government and Nova Scotia Government. To find more information, click here.
To discuss the strategic and commercial opportunities for capitalizing on LNG export projects in Canada, attend the upcoming Canada LNG Export Conference & Exhibition in Calgary.
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