Is There a 'Business Case' for Canadian Liquefied Natural Gas? Just Ask These Countries.

United States

Canada’s closest neighbour and ally became the world’s largest LNG exporter in 2022 and has no plans to slow down the growth of its industry.

Several new LNG projects have received a green light or await a final investment decision (FID). Together, these facilities will propel the U.S. from roughly 12 billion cubic feet per day (bcf/d) of export capacity today to a staggering 30 bcf/d by the end of the decade ^[1].

In 2016, the U.S. had zero LNG export capacity. With expedited regulatory approvals that take less than a third of the time it does for Canadian projects, the U.S. has quickly become number one in the global LNG export game and intends to keep it that way for as long as possible.

Mexico

Mexico – which currently imports all of the natural gas it uses – has announced plans to become one of the world’s top LNG exporters as fast as possible, going from 0 to 6.5 bcf/d of export capacity in a relatively short period of time ^[2].

It plans to rapidly boost natural gas imports from the United States for supply to eight proposed LNG export projects with a combined capacity of 50.2 million tonnes (mtpa), making it the world’s fourth-largest exporter of the fuel.

One of the eight projects is under construction. Despite having a 20-year headstart, Mexico might lap Canada in the volume of LNG exports to the Pacific.

Qatar

The world’s third-largest LNG exporter (behind the U.S. and Australia) plans to boost its export capacity from 10 bcf/d up to 14 bcf/d, with plans to grow even further beyond that ^[3].

Home to the world’s third-largest natural gas reserves, Qatar is partnering with international firms to expand its production and export capacity.

The state-owned energy company has invested $28.7 billion in the North Field East project, which is now under construction and will help the country remain a top global LNG exporter for decades to come.

United Arab Emirates

The UAE is another country that sees a business case for new LNG exporters. It plans on doubling its export capacity amid rapidly growing natural gas demand to more than 2 bcf/d ^[4].

The new plant at Fujairah will produce as much as 9.6 mtpa. Currently, the UAE has three liquefaction plants with a total capacity of 5.8 mtpa.

Australia

The world’s second-largest LNG exporter is looking to retain its position with by developing new facilities to offset declines ^[5].

Shell Australia and its joint venture partner, SGH Energy, have approved the development of the Crux natural gas field off the coast of Western Australia. Construction will begin in 2022, and first gas is expected in 2027.

In total, the project is expected to cost $2.5 billion USD. It will include an export pipeline to connect the platform to the Prelude facility, located approximately 160 kilometres south-west of the Crux field.

Argentina

Argentina’s state-owned oil company and its counterpart have agreed to build a major LNG plant and pipeline to provide gas feedstock, as demand for natural gas spikes globally ^[7].

The joint state-owned project requires an initial investment of around $10 billion, providing approximately 5 million tonnes of LNG during its first year. Proponents say the project will take a decade to complete, and it will likely produce and export up to 25 mtpa of LNG when fully operational.

Argentina’s massive Vaca Muerta shale gas formation will be the source of supply for the facilities.

"We're meeting the objective we set out: to not leave Vaca Muerta's gas in the ground, extract it as fast as we can, use what we need, and then export and collect profits," said President Alberta Fernandez via reporting by Reuters.

Trinidad & Tobago

Latin America’s largest LNG producer has asked major energy firms to assist in increasing gas output so it can help supply the world with the energy it needs, including Europe.

"(LNG) exports are expected to increase this year. There are important conversations taking place on how to assist the rest of the world, including Europe, by increasing LNG output. We just need the gas," Young told Reuters ^[8].

In 2014, Trinidad exported more than 14 million tonnes of LNG, according to Refinitiv Eikon data.

Mozambique

Mozambique is poised to ship its first LNG cargo overseas as governments worldwide look to shore up fuel supplies amid ongoing global energy shortages. The Coral-Sur project is designed to produce 3.4 million metric tonnes of LNG per annum ^[9].

Proponents have said they are already planning a second floating export platform in the Southern African nation that could be operational in less than four years.

Another multi-national energy company has also committed to the $20 billion Mozambique LNG Project, making the Final Investment Decision in 2019. The project is on track to deliver its first shipment in 2024 and will have the ability to expand up to 43 mtpa ^[10].

Algeria

Algeria has agreed to boost LNG exports to Italy in 2022 and beyond, as the African nation looks to become a long-term supplier of gas for the European continent in dire need of new supply sources.

The new deal between the two countries would add up to 9 billion cubic metres of gas from Algeria by 2023-24. Italy says the increased flows will start sometime in the fall of this year ^[11].

Italy’s foreign minister has been working hard to secure alternative energy supply sources amid the War in Ukraine, visiting Algeria, Azerbaijan, Qatar, Congo, Angola and Mozambique with requests to boost LNG exports to Europe ^[14].

Angola

Angola’s state-owned energy firm, in partnership with multinationals, is developing a $12 billion offshore LNG project. Called Angola LNG, it is one of the single largest investments in the Angola oil and gas industry ever seen ^[15].

Upon completion, the project is expected to produce 5.2 mtpa of LNG for global buyers ^[16].

In recent years, Angola’s natural gas exports have increased rapidly due to the development of its LNG sector, up from around 30 billion cubic feet in 2016 to nearly 200 billion cubic feet in 2018.

Nigeria

Nigeria is currently exporting 22.5 mtpa, with plans to expand to 30 mtpa by 2024. The country has already been exporting LNG more more than two decades, and is keen to obtain more global market share than it already has ^[17].

In 2021, the central African nation held a six per cent market share of the global LNG export market and was the world’s sixth-largest exporter of the commodity.

Nigeria is looking at smaller-scale facilities as a means of boosting exports to a world in dire need of more natural gas.

Tanzania

Tanzania, another African country, has signed a major $30-$40 billion deal with multi-national energy companies to build an LNG export terminal on the Indian Ocean ^[13].

Front-end engineering and design (FEED and pre-FEED) are expected to finish within three years, with an FID targeted for sometime in 2025. With a projected 4-5 years for construction, the terminal’s first shipment is expected by the end of the decade.

Overall, Tanzania estimates its recoverable offshore natural gas reserves to be more than 57 trillion cubic feet (1,630 billion cubic metres), which are the sixth-largest in Africa.a

The World Needs More Canadian LNG

With global LNG demand expected to grow from 380 mtpa up to more than 700 mtpa by 2040 (a 90% increase), countries worldwide are taking swift and decisive action to ensure they play a role in supplying the world with the energy it needs for decades to come.

Will Canada follow suit? Or, will we let this once-in-a-lifetime opportunity pass us by while allowing other producers often with little to no transparency in government and weaker protections for human rights reap the rewards?

The choice is clear. Canada must take a stand and become the go-to natural gas supplier it is destined to be. Global energy security today – and in the future – may very well depend on it.

Sources:

_{1 – RBEnergy – Blurred Lines – As the U.S. Races Towards 30 Bcf/d of LNG Exports, What Could It Mean for Upstream Markets?, Date Accessed: September 2022 (https://rbnenergy.com/blurred-lines-as-the-us-races-toward-30-bcf-lng-exports-what-could-it-mean-for-upstream-markets)}

_{2 – Bloomberg – Mexico Plans to Become an Export Hub With US-Drilled Natural Gas, Date Accessed: September 2022 (https://www.bloomberg.com/news/articles/2022-08-12/mexico-plans-to-become-lng-export-hub-using-american-drilled-natural-gas)}

_{3 – Jerusalem Post – Qatar will be world’s largest LNG exporter, but can’t replace Russia, Date Accessed: September 2022 (https://www.jpost.com/middle-east/article-709952#:~:text=The%20%2428.7%20billion%20North%20Field,110%20million%20tons%20per%20year)}

_{4 – Bloomberg – UAE to More Than Double LNG Export Capacity With Fujairah Plant, Date Accessed: September 2022 (https://www.bloomberg.com/news/articles/2022-05-17/uae-to-more-than-double-lng-export-capacity-with-fujairah-plant)}

_{5 – Offshore Technology – Shell approves development of $2.5bn Crux gas field, Western Australia - Date Accessed: September 2022 (https://www.offshore-technology.com/news/shell-crux-gas-field-australia/)}

_{7 – Reuters – Argentina, Petronas ink deal for major LNG plant, gas pipeline, Date Accessed: September 2022 (https://www.reuters.com/markets/commodities/argentinas-ypf-petronas-talks-over-gas-pipeline-lng-plant-source-says-2022-09-01/)}

_{8 – Reuters – Trinidad boosts LNG exports to Europe, rushes more gas output, Date Accessed: September 2022 (https://www.reuters.com/business/energy/trinidad-boosts-lng-exports-europe-rushes-more-gas-output-2022-06-28/)}

_{9 – BNN Bloomberg - Mozambique to Export First LNG as Global Natural-Gas Prices Soar, Date Accessed: September 2022 (https://www.bnnbloomberg.ca/mozambique-to-export-first-lng-as-global-natural-gas-prices-soar-1.1807533)}

_{10 – TotalEnergies – Mozambique LNG - Date Accessed: September 2022 (https://mzlng.totalenergies.co.mz/en)}

_{11 – GIS Reports Online – Africa as an alternative energy source for Europe, Date Accessed: September 2022 (https://www.gisreportsonline.com/r/africa-alternative-energy/)}

_{12 – Natural Gas Intellifence – African LNG Eyed to Assist in Europe’s Quest to Replace Russian Natural Gas, Date Accessed: September 2022 (https://www.naturalgasintel.com/african-lng-eyed-to-assist-in-europes-quest-to-replace-russian-natural-gas/)}

_{13 – Journal of Petroleum Technology – Tanzania Inks Deal with Shell, Equinor for $30-billion LNG Terminal, Date Accessed: September 2022 (https://jpt.spe.org/tanzania-inks-deal-with-shell-equinor-for-30-billion-lng-terminal)}

_{14 – ABC News – Italian premier says Algeria to boost natural gas exports, Date Accessed: September 2022 (https://abcnews.go.com/International/wireStory/italys-premier-sign-gas-deal-algeria-amid-war-84009036)}

_{15 – Angola LNG – About Angola LNG, Date Accessed: September 2022 (https://www.angolalng.com/en/about-angola-lng/)}

_{16 – U.S. Energy Information Administration – Angola, Date Accessed: September 2022 (https://www.eia.gov/international/analysis/country/AGO)}

_{17 – Energy Connects – After 20 years of exporting LNG, Nigeria wants to boost its consumption at home, Date Accessed: September 2022 (https://www.energyconnects.com/opinion/features/2022/march/after-20-years-of-exporting-lng-nigeria-wants-to-boost-its-consumption-at-home/)}

_{18 – Government of Canada – Conversion factors and common units to be used for North American Cooperation on Energy Information, Date Accessed: September 2022 (https://www.nrcan.gc.ca/energy/international/nacei/18057)}

_{19 – Shell – Shell LNG Outlook 2022, Date Accessed: September 2022 (https://www.google.com/search?client=firefox-b-d&q=shell+LNG+outlook+2022)}