Canadian natural gas could find a renaissance in Asian liquefied natural gas markets, according to industry experts at a Calgary oil and gas event. Combined with growing demand for the resource from Alberta's oilsands producers, natural gas exported from British Columbia likely will find a home in Asian Pacific countries in the super-cooled, condensed form of liquefied natural gas, said speakers at the Gas and Oil Expo in Calgary this week.
Not only does Canada have an abundance of resource, particularly as shale gas plays unfold in British Columbia and Alberta, its West Coast is closer to energy-thirsty Asian Pacific markets than competitors such as Qatar and Australia, said Paul Sullivan, global director of LNG with WorleyParsons, on Wednesday.
Apache Canada, EOG Canada and Encana Corp. have proposed a five-million tonne per year LNG terminal in Kitimat, B.C. The National Energy Board currently is conducting a public hearing on a 20-year export licence for the facility.
Prices for LNG in Pacific Asia is 30 per cent to 80 per cent higher than in North America, commanding $10 US per million British thermal units, compared to $4.50 US in the U.S., noted Sullivan. "Gas is becoming the new cordial of the 21st century as coal was to the 19th century," he said. "What I would suggest to you gentlemen is you have look west to Pacific markets -that's where business is."
Liquefied natural gas markets expanded 50 per cent between 2002 and 2007, and is expected to double over the next 25 years, driven by Japan, Korea and China, according to the U.S. Energy Information Administration.
The picture could change if other fossil fuels become cheaper or countries impose price restrictions, but there's little evidence demand for the cleaner burning fuel will do anything but increase, said Susan Sakmar, Esq.
"Nothing is more uncertain than the global natural gas market," said Sakmar, adjunct professor at the University of San Fransisco School of Law. "But the future looks really bright for natural gas despite all of the uncertainties."
Natural gas prices in North America have yet to recover from the shock of shale gas plays flooding the market at the same time the recession dampened demand, falling 19 per cent during the first quarter of 2011 to average $4.19 US per mmBTU
