Canada prepares for LNG boom: First terminal nears start-up

Canada’s west coast could eventually be home to several liquefied natural gas (LNG) export terminals. Work on the first major export terminal is continuing, and it could begin its first deliveries around the middle of next year. A total of five different terminals are in development, most of them smaller in scale.

By the end of this decade, Canada could become one of the leading exporters of liquefied natural gas. Several projects are in development, with the LNG Canada terminal in the province of British Columbia at the most advanced stage. Once completed, it is expected to have a total annual capacity of 12 million tonnes of LNG, equivalent to approximately 16 billion cubic metres of gas.

"The LNG Canada project is now more than 90% complete, and we will be the first terminal built on the west coast. We will have the advantage of shorter shipping times to Asia (compared with the US Gulf Coast)," senior vice-president Teresa Waddington said, according to S&P Global.

The terminal could begin producing LNG as soon as the second half of this year. Its first shipments are then expected to head to the Asian market next year, with interest in Canadian LNG growing particularly in Japan and South Korea.

"From Fukushima to Russia’s invasion of Ukraine, they have been waiting for new sources of LNG, and Canada will play a role. There is huge demand for energy in the Asia-Pacific region, and people are asking what will come after the LNG Canada project," she added.

According to Racim Gribaa, director of Global LNG Consulting, Canada’s west coast offers advantages for the Asian market. Unlike export terminals in the Gulf Coast region, ships do not have to pass through the Panama Canal, which has recently faced water shortages. Similarly, tankers from Qatar have to pass through the Strait of Hormuz, which is exposed to geopolitical risks in the Middle East.

From “zero” to a top 5 LNG exporter?

In addition to the LNG Canada project, at least four other export terminals are at various stages of development, according to S&P Global. These are the Woodfibre, Cedar, Ksi Lisims and Summit Lake PG projects. Together with LNG Canada, they could give Canada export capacity of more than 30 million tonnes a year by 2030. Compared with current exporters and their capacity, Canada could thus rank among the five largest exporters. This, however, depends on the expansion of export capacity in other regions.

"We expect Canada to play a role in energy security, and now is the time for Canada to start supplying energy in response to energy security challenges," said Bryan Cox, director of policy at Petronas.