Canada’s emerging LNG industry has a bright future

World LNG demand rose even during the pandemic, and is expected to nearly double by 2040
By Deborah Jaremko

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.”