Different Shade of Green: Renewable Rich Canada Anticipates Growing LNG Export Moves

Canada gains more than 80% of its electricity mix from carbon-free resources such as hydropower, nuclear and renewables, but even its leadership’s desire for elevated standing as a clean energy nation can ignore the economic allure of exporting natural gas production from British Columbia and Alberta to the rest of the world.

The liquified natural gas (LNG) export market is increasingly attractive for a nation which routinely must discount its abundant fossil fuels production due to overproduction for relatively low domestic demand compared to U.S. customers. New projects along the British Columbia coast are working to deliver LNG for energy-hungry global customers.

Texas-based engineering, procurement and construction (EPC) contractor Fluor Corp. announced completion of the liquefaction Train 2 of the LNG Canada project in Kitimat. Fluor is working with joint venture partner JGC Corp. on the massive facility including natural gas receiving, liquefaction, LNG loading and export terminals designed to produce up to 14 million metric tons of LNG per year.

LNG from the U.S. and Canada is becoming extremely attractive worldwide as European nations move away from Russian-supplied natural gas infrastructure, and Asian nations low in fossil reserves are seeking power supply for growing industrialization and electrification.

“The safe and successful handover of Train 2 is a testament to the teamwork and dedication of everyone involved on this project,” said Pierre Bechelany, Fluor’s Business Group President of Energy Solutions, in a statement. “It reflects the continued commitment to safety, quality and schedule performance by the thousands of workers who contributed to bringing Canadian natural gas to the world.”

LNG Canada is a joint venture comprised of Shell, through its affiliate Shell Canada Energy (40%); PETRONAS, through its wholly-owned entity, North Montney LNG Limited Partnership (25%); PetroChina Company, through its subsidiary PetroChina Kitimat LNG Partnership (15%); Mitsubishi Corporation, through its subsidiary Diamond LNG Canada Partnership (15%); and Korea Gas Corporation, through its wholly-owned subsidiary Kogas Canada LNG Partnership (5%). It is operated through LNG Canada Development.

Canada is further developing other LNG export resources to tap into growing global demand. The proposed Ksi Lisims floating LNG facility near Prince Rupert, British Columbia, could produce about 12 million metric tons per year and is located on land owned by the Nisga’a Nation.

Natural gas from Alberta currently accounts for a majority of Canadian production, although the output from British Columbia is growing steadily, while export to the U.S. is also climbing.

Thanks to domestic shale play production, the U.S. is the world leader in LNG export at close to 12 billion cubic feet per day, according to the federal Energy Information Administration. Most of the top U.S. liquefaction and export projects are located along the Louisiana and Texas coast with the Gulf of Mexico.

Developers such as Glenfarne are working to add capacity on the upper Pacific Coast with the LNG Alaska project.

Natural gas moved by pipeline to terminals is then chilled to about minus 162 Celsius (or -260 degrees Fahrenheit). This reduces gas volume about 600 times and makes LNG stable for long-distance shipping. The LNG is delivered to the receiving nation and then often re-gasified for both power generation and industrial processes.

The International Energy Agency forecasts that global LNG supply will rise 7%, or an additional 40 billion cubic feet, in 2026. This includes anticipated volumes from new export projects in Canada, U.S. and Qatar.