Canada’s emerging LNG industry has a bright future
Canada’s emerging LNG industry could have a bright future ahead, especially considering last year’s 435% increase in LNG prices, driven by strong demand in Asia and Europe. The Woodfibre Liquefied Natural Gas (LNG) project in B.C. was recently approved, and a major expansion is being considered for the LNG Canada plant that is already under construction.
Rising Long-term Demand
Even with COVID lockdowns, world LNG demand rose to 380 million tonnes in 2021, up from 360 million in 2020, and is expected to nearly double by 2040 (to over 700 million tonnes).
“I think what we are seeing is the world starting to realize that natural gas is an absolutely critical part of not just the energy mix, but the clean energy mix,” says Rebecca Scott, communications director with Woodfibre LNG.
The $40-billion LNG Canada project is now over 50 per cent complete and expected to start shipping LNG to world markets in 2025.
To be built on a 100-year-old pulp mill in Squamish, B.C., the Woodfibre LNG project’s $625 million budget for this year includes $25 million for ongoing remediation, with major completion expected in 2027.
Extra-low GHG LNG for a sustainable future
Although small, producing 2.1 megatonnes of LNG per year, Woodfibre is expected to make an outsized difference in reducing emissions for its customers in Asia.
When used to replace coal-fired electricity, the LNG produced at Woodfibre will reduce 3.5 million tonnes of CO2 equivalent per year. That means 87.5 megatonnes total over the project’s 25-year lifespan, over 27 times more emissions reduced in Asia than Woodfibre will produce in Canada over the same period.
The project is expected to have the lowest emissions of any LNG plant in the world, even lower than LNG Canada, which will have emissions per tonne that are less than half the global average.
Greater demand for the right producer
The natural gas for Woodfibre LNG will be sourced from Pacific Canbriam Energy, which in 2021 received third party certification for excellence in environmental and social responsibility from New York-based non-profit Equitable Origin.
“When you can have a product like Canadian LNG, which is leaps and bounds ahead of really every other jurisdiction in the world in terms of responsibility and sustainability and stability, that product comes in incredibly high demand,” Scott says.
Woodfibre has deals in place to sell 70% of its LNG to global manager BP Gas Marketing.
Scott says Canada can make a meaningful impact to help lower global emissions by exporting LNG.
“Canada only contributes 1.6% of the world’s emissions. If we just went dark and didn’t emit a single molecule of CO2 and reduced our emissions to zero, China’s growth would eat up that percentage in less than a year,” she says.
“The question becomes not how we lower our own emissions, because really that’s just a drop in the ocean, [but] how we help higher emitting countries lower their emissions. That’s where Canadian LNG has such a huge role to play.”