I was ranting earlier today about how Canada had squandered its big lead in becoming the natural gas export hub of North America. Just new Canada approved four licenses for several natural gas export projects. The Pacific Northwest project, which is a partnership with Malaysian giant Petronas won’t be ready until late-2018 at the earliest.
The good news for Canada is that these projects will represent significant capex, something that could give the loonie some life in the long term. The one advantage Canada has over the US is its closer proximity to China, although the US has approved an export project in nearby Oregon.
The projects approved are:
- Pacific Northwest (Petronas) late-2018, 19m tonnes annually
- LCC (Exxon) 2021-2023, up to 30m tonnes annually
- Woodfibre Q1 2017, 2.1m tonnes annually
- Prince Rupert 14m tonnes annually, no timeline
Just because the projects are approved doesn’t mean they’ll go ahead. Because of the sudden interest from the US in LNG exports, some may decide they’ve been beaten to the punch. It’s an example of how good government leadership can be the difference between endless bureaucracy and thousands of jobs and billions in investment. At full capacity and current LNG prices, those exports would be worth about $54 billion/year, or increase total Canadian exports by about 10%.
A rough estimate is thta contructing an LNG plant costs $1.5B per 1m tonne of capacity. If all those projects go ahead, that’s nearly 100B in investment plus the pipelines.
