LNG Canada: 10 Frequently Asked Questions + Answers

The LNG Canada project has been dubbed 'the largest private sector investment in Canadian history.' If you're wondering about this mega-project on British Columbia's coast, you'll want to check out these 10 frequently asked questions and answers regarding LNG Canada.

#1 - What is 'LNG' anyways?

LNG Canada must get built because USA will become self-sufficient in natural gas soon

LNG is an abbreviation for liquefied natural gas. In gaseous form, natural gas comes from various types of underground wells and, in this case, is sent via pipeline to a facility for processing.

Cooling this gas to a temperature of at least -160 degrees Celsius (-256 degrees Fahrenheit) transforms it into a liquid which is about 1/600th of its original volume, making it much safer and easier to transport.

LNG Canada is just one of several facilities underway around the world built to load specially engineered transport ships, many of which will then find their way to nations on the other side of the globe.

Both the United States and Australia are at least a decade ahead of Canada in the development of LNG liquefaction facilities and then shipping that product to global buyers.

#2 - What is the 'LNG Canada' project?

LNG Canada Environmental Footprint Best in the World

LNG Canada is a $40 billion project consisting of a new processing plant, LNG-carrier loading facilities and 670-kilometre pipeline called Coastal GasLink (CGL).

CGL is a key component of the project as it will transport natural gas from the Dawson Creek area in northeastern British Columbia to Kitimat on the west coast where liquefaction and shipping will take place.

While much can be said about LNG Canada, it perhaps is best known for its exceptionally low environmental footprint as it has the potential to source most, if not all of its power from renewables - also known as 'electrification.'

According to a recent study, the project is forecast to operate with about 50% the GHG emissions intensity of the global LNG facility average, producing some of the most competitive carbon footprint gas in the world.

LNG Canada is also a multi-phase project with room for expansion that could double its initial output. At full capacity, it would be capable of removing tens of millions of cars off the road per annum by displacing energy supply from coal-fired power plants in Asia (more below).

#3 - How much natural gas does B.C. have?All 20 First Nations Support Coastal GasLink Pipeline in British Columbia

The Government of British Columbia estimates it has around 93 trillion cubic metres (m3) of natural gas within its borders, most of which is found in the northeastern part of the province.

To put the amount of natural gas in B.C. into perspective, in 2018 the world consumed approximately 3.85 trillion m3 of natural gas (or 136 trillion cubic feet, ft3) (BP Statistical Review of World Energy 2019). That amount of natural gas would fill about 90% of the Grand Canyon.

Do the math and you'll find that B.C.'s natural gas resources are plentiful enough to supply all regional demand within Canada and even a good chunk the world's total demand for many years!

#4 - Why is Canada exporting LNG?

As global demand for all forms of energy - including oil and natural gas - continues to increase and is projected to for decades to come, it only makes sense Canada takes part and begins exporting its ethical and responsibly produced product to countries where there's high demand.

According to the International Energy Agency (IEA), global demand for natural gas is expected to increase 45% by 2040. Much of that growth will be in countries like India and China, nations who are currently building countless coal power plants to meet their energy needs.

Environmental organizations and technological leaders alike have recognized that natural gas is an important stepping stone in the transition from fossil fuels to renewable energy sources. What the IEA has to say on the transition from coal to natural gas:

"There is potential in today’s power sector to reduce up to 1.2 gigatonnes of COemissions by switching from coal to existing gas-fired plants... Doing so would bring down global power sector emissions by 10% and total energy-related CO2 emissions by 4%."

As a matter of fact, a fully developed LNG Canada project could reduce global carbon dioxide (CO2) emissions by an amount equivalent to 15% of Canada's overall GHG emissions per annum.

With the potential for full electrification of Canadian LNG projects, not to mention in a country with one of the most ethical and environmentally responsible records for petroleum production in the world, natural gas from Canada has the ability to reduce global GHGs versus if that product were to come from another country with less environmental regulations and transparency.

#5 - Which companies have invested into LNG Canada?

BC LNG Will Be Lowest GHG Emitting Facility of its Kind in the World

Five companies from five separate countries have agreed to work together to build this project including:

> Royal Dutch Shell plc, through Shell Canada Energy (40%)

> PETRONAS, through North Montney LNG Limited Partnership (25%)

> PetroChina Company Limited, through PetroChina Canada Ltd. (15%)

> Mitsubishi Corporation, through Diamond LNG Canada Partnership (15%)

> Korea Gas Corporation, through Kogas Canada LNG Limited (5%)

TC energy, a midstream energy company, will also take part by building and operating Coastal GasLink, although it just recently sold a 65 per cent stake in the pipeline to KKR and Alberta Investment Management Corporation (AIMCo).

Several oil and gas companies will also take part in drilling the natural gas plays in northeastern British Columbia in order to provide LNG Canada with its feedstock.

#6 - What are the economic benefits of LNG Canada?

LNG Canada Economic Benefits $23 billion in government revenues

> $23 billion in new government revenues over the next 41 years

> 20,000 direct, indirect and induced jobs in B.C.

> Creation of up to 10,000 jobs during construction

> Around 950 permanent full-time jobs once completed

> $475 million in annual tax payments to the B.C. government

> $3.7 billion added to B.C.’s annual GDP

Coastal GasLink economic benefits:

Economic Benefits of LNG Canada in British Columbia

> Up to 2,500 jobs created during construction, and over 90 permanent full-time, well-paying jobs during

> $620 million in contracts awarded to Indigenous businesses and contractors

> Additional $400 million in contracts awarded to local B.C. communities and Indigenous businesses

> Long-term benefit agreements with all 20 First Nations along the pipeline right-of-way

> $20 million a year in generated tax revenues for governments

#7 - What are the environmental benefits of LNG Canada?

Shipping Times from BC Coast to Asia - LNG Canada Project

> Displacing coal-fired power plants in Asia, reducing global CO2 emissions equivalent to taking millions of cars off the road each year (more above at #4)

> LNG shipping is safe; over 90,000 cargoes have been delivered without a single loss since the first commercial cargo was shipped in 1964

> Shorter shipping times to Asia compared to most other LNG exporters, greatly reducing emissions from tanker transport

> Creating little emissions from power requirements for the liquefaction process and other operations through electrification versus other global facilities

> Meaningful consultations and engagements with First Nations communities and strict regulatory adherence with government to create the best-in-class environmental protection and mitigation plans

> Most of the energy infrastructure to be used in this project is newer or brand new, meaning best practices are used and typically include in-line monitoring and leak detection

> Canada's flaring regulations are world-class; if the rest of the world achieved what Canada's oil and gas industry has in terms of flaring, total world GHG emissions from flaring would be reduced by 23%, equivalent to taking 110 million cars off the road per year

> A cubic metre of natural gas not produced in Canada will come from somewhere else, likely with less stringent environmental rules and regulations

#8 - How long will it take to build LNG Canada?

LNG Canada will create up to 10,000 jobs during construction

According to LNG Canada’s previous CEO Andy Calitz, approvals were in place with the National Energy Board, Department of Fisheries and Oceans, BC Hydro and 25 First Nations to go ahead and commence construction well over a year ago.

Two trains are expected to be completed and fully operational sometime in 2025. October of 2019 marked the first full year of construction for LNG Canada.

Meanwhile, about 30% of the right-of-way for the Coastal GasLink pipeline has been cleared as of January 2020 as other construction activities continue.

#9 - How much GHGs will LNG Canada emit?

LNG Facility Performance, Canada's Green LNG Advantage - Special Report 2

LNG Facility Performance - Delphi

The graph above from Canada's Green LNG Advantage-Special Report 2 shows how LNG Canada's GHG emissions intensity on a tonne of CO2 equivalent per tonne of LNG produced (tCO2e/LNG) is projected to outperform other major facilities around the world. It undercuts the second best (EMPNG LNG) by roughly a third.

As a matter of fact, the project is the first in a string of proposed facilities on Canada's west and east coast that will have a world-class emissions intensity profile. A few examples from the report cited above:

> LNG Canada (BC): 0.15 (tCO2e/LNG)

> Kitimat LNG (BC): 0.05 to 0.1 (tCO2e/LNG)

> Woodfibre LNG (BC): 0.06-0.08 (tCO2e/LNG)

> Tilbury LNG (BC): 0.06-0.08 (tCO2e/LNG)

> Energie Saguenay (QC): 0.04 (tCO2e/LNG)

According to LNG Canada, the liquefied natural gas coming from its refineries could reduce global CO2 emissions by 60 to 90 million tonnes annually. That’s more than the total emissions of British Columbia and about 10 percent of Canada’s total emissions annually.

Note: this figure has gone up to 15% of Canada's total emissions annually based on calculations done by Desjardins. See them yourself by clicking on the link.

#10 - Has LNG Canada been approved in good standing?

Energie Saguenay LNG Quebec GHG Emissions Profile World-Class

All the necessary approvals have been obtained by LNG Canada and the Government of British Columbia which has helped moved this nation-building project forward.

LNG Canada and Coastal GasLink are set to benefit 25 First nations through agreements extending over the project's lifespan.

Coastal GasLink, however, is seeing some opposition from a select few First Nations. Hopefully that community can resolve its governance issues internally and move forward with the project as well.

LNG Canada is Good for Canadians and the World

When governments talk about reducing their emissions, they need to realize that we live in a global environment. An LNG project off the coast of British Columbia which has the capacity to displace up to or more than 40 coal-fired power plants somewhere else in the world means reduced emissions on a global scale.

Canada’s leaders talk about climate change in a global context. They should also do the same for emissions and help reduce GHGs globally by supplying the world with natural gas from one of the most ethical, transparent and environmentally friendly petroleum producing nations on the planet.


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