LNG opportunities abound in Canada, but also challenges, study finds

Detailed summary

Meeting Ottawa’s export targets could generate $888-billion in GDP through 2050, but regulatory delays and infrastructure constraints pose hurdles

Meeting Canada’s liquefied natural gas export targets could stimulate nearly $1-trillion of investment across the fuel’s value chain and contribute $888-billion to GDP through 2050, according to a new report.

Prime Minister Mark Carney has said that Canada’s total LNG exports could reach up to 100 million tonnes annually by 2040. The government’s ambition for scaling up the sector would make it the world’s third-largest exporter while also contributing significant reductions to global carbon emissions, said the study by S&P Global Energy, released Thursday.

However, time is a pressing factor to meet this target, with various regulatory and competitive hurdles still standing in Canada’s path, and a dearth of projects awaiting final investment decisions.

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Canada has “been in a tough spot economically,” falling far short of where it could be in the world market given its competitive strengths of significant natural resources and geographic position, Daniel Yergin, renowned author and vice-chairman of S&P Global, said in an interview.

The study examined Canada’s opportunities around LNG and challenges that have stymied the sector from reaching its full potential. Those include cost uncertainty, lengthy permitting times, policy instability and associated infrastructure constraints, such as power capacity and transmission.

Addressing those issues quickly and effectively could present a trillion-dollar investment boon and support nearly a quarter million jobs annually across the entire LNG value chain in Canada over the next 25 years, the study concluded, including the natural gas liquids (NGL) sector, gas production and pipeline construction.

The world is going to need more LNG, said Kevin Birn, S&P’s chief Canadian energy analyst. Given the crises in both the oil and gas markets this year caused largely by the war in Iran, Canada has a lot to offer, he said, though the country has to now…

“But…

Opening of the article, excerpted from The Globe and Mail (Report on Business). To read the rest, open the article on the publisher's site.