Home Global Politics Canada’s complications getting LNG to a thirsty world are allowing U.S. opponents to thrive

Canada’s complications getting LNG to a thirsty world are allowing U.S. opponents to thrive

by Good News

Woodfibre LNG workers inquire of out over Howe Sound at the mission’s industrial area shut to Squamish, B.C.John Lehmann/Woodfibre LNG

From Darrin Marshall’s standpoint, a mountain stands in the capacity of Woodfibre LNG’s just of transport liquefied natural gasoline in a foreign country from Canada’s West Wing.

As FortisBC’s mission director for a brand original pipeline that can feed Woodfibre LNG’s proposed export terminal, he has devised plans to bore thru the mountain shut to Squamish, B.C., about 65 kilometres north of Vancouver.

Mr. Marshall, dwarfed by the mountain as he stands on a spit of land that extends into the Squamish River, parts to the set up where a tunnel-unimaginative machine would be positioned next year. Woodfibre LNG is found at the positioning of a frail pulp mill on the west facet of Howe Sound, which outcomes in the Pacific Ocean. “Essentially the most prudent option is to elongate the tunnel the total capacity to the positioning,” he acknowledged.

Woodfibre LNG’s grief is emblematic of export proposals in Canada. The substantial majority of LNG initiatives all the draw in which thru the last decade had been mired in dear logistical complications that believe thwarted or delayed contractors. It has turn out to be an ordeal to kind pipelines for transporting natural gasoline to proposed terminals, which would supercool natural gasoline into liquid invent.

Darrin Marshall is FortisBC’s Eagle Mountain Woodfibre Gas Pipeline Project director.DARRYL DYCK/The Globe and Mail

FortisBC no longer too long ago proposed to make a tunnel with two pipelines inside of, operating 9 kilometres below the Skwelwil’em Squamish estuary natural world management set up and thru Monmouth Ridge Mountain. There would be a 2nd tunnel-unimaginative machine at Woodfibre LNG’s area.

The necessity is getting more urgent. Companies and governments desire to flee up plans for LNG exports after Russia’s invasion of Ukraine in February. The war has upended world energy markets, leaving Europe scrambling to reduce back its dependence on natural gasoline from Russia.

Canada has a golden opportunity to aid Europe. But getting into the LNG export recreation requires deep pockets and a grand mindset for inserting terrible bets on terminals that assuredly engage at the very least 5 years to make – assuming builders already believe their pipeline route plans firmed up.

There is moreover larger blowback to deal with. Opposition to pipelines and terminals from environmentalists and key Indigenous leaders has mounted.

Briefly, even though Canada is the realm’s sixth-biggest producer of natural gasoline, it isn’t in any area to aid Europe fleet and straight away with LNG provides.

“These firms stamp that thanks to a lack of infrastructure, it’s very grand to kind these initiatives,” acknowledged Omar Mawji, a Toronto-basically basically based analyst with the Institute for Power Economics and Monetary Prognosis.

LNG Canada provide route

Citadel St. John

Coastal GasLink pipeline mission

TC Power Corp.’s Nova Gas

Transmission Ltd. (NGTL)

reward system

Citadel St. James

Kitimat

Prince George

BRITISH COLUMBIA

TC Power Corp.’s Coastal GasLink natural gasoline

pipeline mission has the give a boost to of all 20 elected

Indigenous band councils alongside the 670-kilometre

route from northeast B.C. to Kitimat. But the Place of work

of the Wet’suwet’en, governed by hereditary

chiefs, opposes the pipeline mission, asserting Indige-

nous authority rests with hereditary leaders, no longer

elected ones, over a broad section of the route.

LNG Canada mission area

75

U.S.

KM

CANADA

Prince

Terrace

Rupert

Kitimat

Kitkatla

Klemtu

DETAIL

Kitimat River

Royal Dutch Shell PLC is

the biggest partner in

LNG Canada, with a 40

per cent stake. The

varied partners are:

Malaysia’s express-owned

Petronas (25 per cent),

PetroChina (15 per cent),

Japan’s Mitsubishi Corp.

(15 per cent) and South

Korea’s Kogas

(5 per cent).

Present area

brent jang and JOHN SOPINSKI/THE GLOBE AND MAIL

SOURCE: lng canada; royal dutch shell;

coastalgaslink.com

LNG Canada provide route

Citadel St. John

Coastal GasLink pipeline mission

TC Power Corp.’s Nova Gas

Transmission Ltd. (NGTL)

reward system

Smithers

Citadel St. James

Kitimat

Prince George

BRITISH COLUMBIA

TC Power Corp.’s Coastal GasLink natural gasoline pipeline

mission has the give a boost to of all 20 elected Indigenous band

councils alongside the 670-kilometre route from northeast

B.C. to Kitimat. But the Place of work of the Wet’suwet’en, gov-

erned by hereditary chiefs, opposes the pipeline mission,

asserting Indigenous authority rests with hereditary leaders,

no longer elected ones, over a broad section of the route.

LNG Canada mission area

75

U.S.

KM

CANADA

Prince

Terrace

Rupert

Kitimat

Kitkatla

Klemtu

DETAIL

Kitimat River

Minette Bay

Present area

Royal Dutch Shell PLC is

the biggest partner in LNG

Canada, with a 40 per cent

stake. The numerous partners

are: Malaysia’s express-

owned Petronas (25

per cent), PetroChina (15

per cent), Japan’s Mitsubi-

shi Corp. (15 per cent) and

South Korea’s Kogas

(5 per cent).

brent jang and JOHN SOPINSKI/THE GLOBE AND MAIL

SOURCE: lng canada; royal dutch shell; coastalgaslink.com

LNG Canada provide route

Citadel St. John

Coastal GasLink pipeline mission

TC Power Corp.’s Nova Gas Transmission

Ltd. (NGTL) reward system

Mackenzie

Citadel St. James

Smithers

Kitimat

Prince George

BRITISH COLUMBIA

TC Power Corp.’s Coastal GasLink natural gasoline pipeline mission has the give a boost to of

all 20 elected Indigenous band councils alongside the 670-kilometre route from

northeast B.C. to Kitimat. But the Place of work of the Wet’suwet’en, governed by hered-

itary chiefs, opposes the pipeline mission, asserting Indigenous authority rests with

leaders, no longer elected ones, over a broad section of the route.

LNG Canada mission area

75

U.S.

KM

CANADA

Prince

Terrace

Rupert

Kitimat

Kitkatla

Klemtu

DETAIL

Kitimat River

Present area

Minette Bay

Royal Dutch Shell PLC is the

biggest partner in LNG

Canada, with a 40 per cent

stake. The numerous partners are:

Malaysia’s express-owned

Petronas (25 per cent), Petro

China (15 per cent), Japan’s

Mitsubishi Corp. (15 per cent)

and South Korea’s Kogas

(5 per cent).

brent jang and JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: lng

canada; royal dutch shell; coastalgaslink.com

“The merely fact is that if I’m an organization and I desire to kind a pipeline, that’s something I in actuality deserve to part into my prognosis,” Mr. Mawji acknowledged.

Russia’s invasion of Ukraine has moreover reignited curiosity in proposals for LNG exports from Canada’s East Wing. LNG Newfoundland and Labrador Ltd. is studying the feasibility of securing offshore natural gasoline from the Huge Banks. It wishes to originate up LNG exports to Europe in 2030, but first, it must obtain regulatory approvals and kind a 600-kilometre pipeline alongside the flooring of the Atlantic Ocean.

Ottawa in talks with Repsol, Pieridae Power about speeding up proposed east wing LNG export terminals

No topic pipeline challenges and varied barriers, the federal authorities dreams that Canadian-basically basically based export terminals might perhaps aid boost world provides of LNG by the tip of this decade. But Ottawa is moreover quiet striving to satisfy Canada’s catch-zero carbon emissions targets by 2050.

“We are enthusiastic to aid our allies with energy security, but we are moreover committed to combating climate alternate,” acknowledged Natural Sources Minister Jonathan Wilkinson. “It is possible you’ll perhaps kind each and each. You wish so that you just can dawdle and chew gum at the same time. We need so that you just can judge how we aid our allies at a time of broad crisis.”

If something else, getting Canadian LNG initiatives planned and financed, and securing regulatory approvals and construction permits for pipelines and terminals, is getting more difficult.

Of the 24 Canadian LNG proposals tracked by federal authorities in 2017, 18 were in British Columbia, all centered on exports to Asia. There had been moreover three in Nova Scotia, two in Quebec and one in Contemporary Brunswick, each and each focusing on Europe.

This present day, alternate analysts train appropriate 9 proposals believe a giant gamble of success – 5 in B.C., one in Quebec and three in Atlantic Canada.

A fact take a look at signifies three believe the appropriate odds of forging forward with construction inside of the subsequent three years. All are in B.C.: LNG Canada’s Allotment 2 in Kitimat, and two shrimp-scale initiatives: Cedar LNG, moreover in Kitimat, and Woodfibre LNG, shut to Squamish. There is moreover LNG Canada’s Allotment 1, on the appropriate observe for completion in 2025, when it might turn out to be the country’s first export terminal for the gas.

Meanwhile, the USA is racing forward. In 2015, Canada and the U.S. didn’t believe any LNG export terminals. This present day, seven are working south of the border, and at the very least one other 5 services and products, alongside side expansions at three reward sites, are liable to begin by 2028.

In a signal of the cases of Canada’s diminished LNG expectations, gatherings for proponents believe moreover been scaled aid over the years. An world conference staged by the then BC Liberal authorities in 2015 attracted 1,600 delegates in Vancouver. In mid-2017, two weeks after taking place of job, the NDP cancelled a conference planned for that fall.

Subsequent week, the Canada Gas & LNG Exhibition and Convention, an replacement-backed tournament, is predicted to blueprint about 500 delegates in Vancouver. That might be rather larger than the outdated non-public-sector conference held in 2019, but the theme stays the same: Canada’s LNG opportunity.

Why is Canada so shut to turning precise into a world LNG participant, but quiet to this level away?

A 10-storey module arrives at LNG Canada’s export terminal area in Kitimat, B.C., in March, 2022.LNG Canada

At the head of Douglas Channel, construction of LNG Canada’s Allotment 1 terminal started in 2018 on a Kitimat industrial area on the Haisla Nation’s outdated territory.

A 10-storey module arrived at LNG Canada from China two months ago, the most considerable in a series of broad devices that will most most likely be save in over the subsequent 18 months.

LNG Canada’s seven years of construction for Allotment 1 will fee $18-billion, and the co-owners of the joint mission are pondering whether or no longer to approve Allotment 2, which would double the export skill to 28 million tonnes a year. The Shell PLC-led joint mission is the appropriate LNG export terminal beneath construction in the country.

The LNG exports to Asia would no longer straight away aid Europe attributable to these original provides would free up the gas in varied areas in the realm, which can merely be rerouted to European worldwide locations looking out for to wean themselves off Russian natural gasoline.

LNG Canada’s engineering entails Canadian and world provide chains. Huge modules are being built at China Offshore Oil Engineering Co. Ltd.’s fabrication yard in Qingdao, China. The 10-storey module that arrived in March will most most likely be connected to the 670-kilometre Coastal GasLink pipeline system to be operated by TC Power Corp.

While LNG Canada is by far the most developed of any export plans on this country, serious infrastructure considerations remain.

The Coastal GasLink pipeline is being built to transport natural gasoline from northeastern B.C. to LNG Canada’s Kitimat area, and it’s dear and contentious. The pipeline’s latest budget is $6.6-billion, even though alternate consultants estimate fee overruns of $1-billion. In February, TC Power reached option agreements to promote a 10 per cent stake in Coastal GasLink to 2 groups of elected First Worldwide locations alongside the route.

But a vocal team of Wet’suwet’en Nation hereditary chiefs and their supporters train that the pipeline mission quiet would now not believe the consent of these hereditary leaders.

John Ridsdale, a climate activist whose Wet’suwet’en hereditary chief name is Na’Moks, acknowledged continuing demonstrations in opposition to Coastal GasLink are moreover designed to shake investor self perception in varied proposed B.C. pipeline routes. These consist of Enbridge Inc.’s Pacific Amble Pipeline and Westcoast Connector Gas Transmission, as well to TC Power’s Prince Rupert Gas Transmission.

Plans for Pacific Amble Pipeline demand the route to high-tail the Wet’suwet’en’s outdated territory on the capacity to delivering natural gasoline to Bish Cove, located shut to Kitimat. Remaining year, Chevron Corp. and Woodside Petroleum Ltd. indefinitely suspended their Bish Cove mission.

“Did we scare them away? I obtain they wakened to the anguish of shedding money,” Mr. Ridsdale acknowledged. Chevron and Woodside in the slay selected their very cling that the economics didn’t fabricate sense for his or her LNG ambitions. No buyers believe emerged for the Bish Cove proposal.

Chevron and Woodside disclosed a entire of US$2.32-billion in writedowns associated to asset devaluations from their investments in their joint mission. The express preparation and varied work shut to Kitimat, alongside side surroundings up a brand original avenue alongside grand terrain shut to Douglas Channel, turned out to be powerful more dear and grand than initially anticipated.

The express of a planned non permanent work camp for the proposed FortisBC Eagle Mountain Woodfibre Gas Pipeline Project. The powerful-delayed mission is privately owned by Singapore-basically basically based RGE Pte. Ltd. and controlled by Indonesian businessman Sukanto Tanoto.DARRYL DYCK/The Globe and Mail

Besides LNG Canada’s Allotment 2, appropriate four varied proposals for exporting with dedicated LNG vessels remain active in British Columbia: Cedar LNG, Woodfibre LNG, Ksi Lisims LNG and expansion plans by a terminal known as Tilbury LNG, which is in the in the intervening time centered on manufacturing for domestic utilize and storage. One area of interest participant in B.C., Port Edward LNG shut to Prince Rupert, is pondering exporting LNG in containers on a in actuality shrimp scale: 300,000 tonnes a year.

A team of producers is known as Rockies LNG is promoting the Ksi Lisims LNG mission, in collaboration with the Nisga’a Nation. Rockies LNG has narrowed its pipeline route all over northern B.C. to both Westcoast Connector Gas Transmission or Prince Rupert Gas Transmission. No topic route is chosen is hotfoot to be controversial.

Groups corresponding to My Sea to Sky, the Desolate tract Committee and the Canadian Association of Physicians for the Environment believe antagonistic LNG proposals in B.C.

Development on the Coastal GasLink pipeline mission is with regards to 55-per-cent accomplished. The pipeline system is already designed to believe the skill to accommodate Cedar LNG’s wishes and LNG Canada’s doable Allotment 2, discipline to adding more compressor stations.

The Haisla Nation co-owns the Cedar LNG mission in Kitimat with Pembina Pipeline Corp., which joined the mission closing year. “Adding Pembina to our physique of workers has no doubt solidified our self perception,” acknowledged Haisla elected Chief Councillor Crystal Smith.

Haisla leaders train LNG poses far fewer environmental dangers than indecent oil, noting that they vehemently antagonistic the now-defunct Northern Gateway oil pipeline plans. Cedar LNG plans to make utilize of a floating manufacturing facility, and rely upon electric-drive technology – which is more dear than natural-gasoline-fired generators – to liquefy three million tonnes a year.

Electrical drive powered by hydro emits far lower ranges of greenhouse gases, and Susannah Pierce, Shell Canada president and country chair, is receptive to the technology for Allotment 2, which would be a alternate from the natural-gasoline-fired generators in Allotment 1. Shell PLC owns 40 per cent of LNG Canada and might perhaps merely work with its four joint mission partners (JVPs) to inquire of the feasibility of hydroelectricity for Allotment 2, Ms. Pierce acknowledged.

“It is something that the JVPs deserve to in actual fact engage a peek at themselves,” she acknowledged. “They’re going to inquire of at their choices around the realm, they’re going to inquire of at the affordability and the economics of this particular 2nd share and high-tail from there.”

Peter Tertzakian, ARC Power Compare Institute’s deputy director, acknowledged the expansion of LNG Canada is, in various ways, the most promising mission merely now. “The pro of LNG Canada is that nearly all the infrastructure will most most likely be in area already,” he acknowledged.

The West Wing moreover has competitive advantages over the East Wing thanks to powerful shorter distances for natural gasoline to be transported from northeast B.C. and Alberta, thru varied connecting lines.

FortisBC’s 50-kilometre pipeline route would originate up in the Eagle Mountain express, shut to the Vancouver suburb of Coquitlam, and slay at Woodfibre LNG. FortisBC’s Mr. Marshall acknowledged the principle that of getting two pipelines in area of 1 inside of the tunnel thru Monmouth Ridge Mountain and the Squamish set up would provide a backup system in case of any effort with one among the pipes.

But the cost of FortisBC’s proposed 9-kilometre tunnel and the 2 pipelines inside of is estimated at $341-million. That’s sharply larger than for the genuine plans, which were subsequently dropped thanks to the anguish of environmental ache to the estuary. The original estimate doesn’t even consist of the leisure of the 50-kilometre pipeline route.

The express of a planned non permanent work camp for the proposed Woodfibre Gas Pipeline Project in Squamish, B.C. The company expects to accommodate more than 500 non-native workers at the camp in the center of the height of construction.DARRYL DYCK/The Globe and Mail

The powerful-delayed Woodfibre LNG mission is privately owned by Singapore-basically basically based RGE Pte. Ltd. and controlled by Indonesian businessman Sukanto Tanoto. It would believe an export skill of two.1 million tonnes a year, or one-seventh the scale of LNG Canada’s Allotment 1. Floating LNG storage tanks would be positioned on the waters of Howe Sound, with the onshore terminal to flee on hydroelectric energy.

FortisBC, the biggest distributor of natural gasoline to homes in British Columbia, no longer too long ago submitted its revised pipeline plans to the B.C. Environmental Evaluate Place of work and the Squamish Nation, which will review the major points sooner than deciding whether or no longer to approve the adjustments.

As Canada struggles, U.S. LNG exports soar. Supplies of natural gasoline from the abundant Permian Basin in Texas and Contemporary Mexico are a rather quick distance to 5 export terminals alongside the U.S. Gulf Wing.

The Calcasieu Go mission in Louisiana started exporting in February, turning into the seventh U.S. LNG export facility in operation. There are three terminals in Louisiana, two in Texas, one in Maryland and one in Georgia. No lower than 5 more are anticipated to be on dawdle inside of six years.

Golden Go LNG, a joint mission between Qatar and Exxon Mobil Corp., is eyeing an export originate up date in Texas in 2024.

The array of U.S. LNG initiatives on the horizon alarms climate activists. “A flurry of latest gasoline export services and products that can ship gas basically to Asia and Europe will wreak havoc on Louisiana’s Gulf Wing,” in accordance to a grassroots team organized by the Louisiana Bucket Brigade.

A drill rig in the Permian Basin shut to Stanton, Texas. Supplies of natural gasoline from the abundant basin are a rather quick distance to 5 export terminals alongside the U.S. Gulf Wing.TAMIR KALIFA/The Contemporary York Instances News Carrier

Clark Williams-Derry, a Seattle-basically basically based analyst with the Institute for Power Economics and Monetary Prognosis, ranks the Plaquemines LNG proposal in Louisiana as one among 4 entrance-runners striving to acquire a shovel in the flooring in the U.S. The numerous high possibilities are expansions of reward terminals: Cameron LNG in Louisiana and Corpus Christi Liquefaction and Freeport LNG in Texas.

When put next with the U.S. entrance-runners, LNG Canada’s Allotment 2 quiet has a protracted capacity to pass sooner than turning into fact, Mr. Williams-Derry acknowledged. By the level that LNG Canada’s Allotment 1 begins exporting in 2025, this might perhaps be 9 years after the most considerable U.S. LNG facility started working. Cheniere Power Inc.’s Sabine Go LNG mission in Louisiana opened in 2016, making its initial shipment to Brazil.

On Canada’s East Wing, Repsol SA’s Saint John LNG in Contemporary Brunswick, Pieridae Power Ltd.’s Goldboro LNG in Nova Scotia and LNG Newfoundland and Labrador are possibilities.

Quebec, Contemporary Brunswick and Nova Scotia would stand a bigger probability if the initiatives in these provinces might per chance accumulate natural gasoline from the U.S. Northeast, especially from the Marcellus shale deposits in Pennsylvania which would be share of the Appalachian basin.

But the U.S. has its cling domestic opponents for natural gasoline, that draw Quebec, Contemporary Brunswick and Nova Scotia deserve to rely upon Western Canada for his or her gas source.

Canada’s lack of infrastructure stays a considerable obstacle to East Wing terminals. Upgrades and expansions would be considerable on TC Power’s pipeline system thru Ontario and Quebec, in talk about in confidence to hook up with a snaking route that outcomes in the Maritimes & Northeast Pipeline from Contemporary England to Nova Scotia.

Except adjustments are made to make stronger and enlarge the system, the missing link threatens to be a showstopper for proposals in Quebec, Contemporary Brunswick and Nova Scotia, given the reliance on transporting natural gasoline long distances from Western Canada.

Howe Sound is viewed taking a peek south from the Spit in Squamish, B.C. The slay of a tunnel for the proposed FortisBC pipeline expansion to the Woodfibre LNG area on Howe Sound is planned to be located in the set up.DARRYL DYCK/The Globe and Mail

Smooth, Ottawa has been touting East Wing proposals as a mode to straight away aid Europe in the center of a time of energy shortages.

Mr. Wilkinson, the Natural Sources Minister, acknowledged LNG proponents face time pressures. “We are attracted to opportunities on the East Wing to aid our European chums if it’s far also completed inside of the associated time physique,” he acknowledged. “We moreover deserve to be particular that that we don’t desire to create stranded resources attributable to we can not proceed to burn natural gasoline in a large capacity around the realm if we’re going to carry out catch zero by 2050.”

Leo Power, president of LNG Newfoundland and Labrador, acknowledged an overhaul of the country’s regulatory system in 2019 draw larger scrutiny of LNG export initiatives by the Canada Power Regulator and the Affect Evaluate Agency of Canada.

“Query for LNG is rising so snappily,” Mr. Power acknowledged. “We need easy job that merchants can believe the boldness that this mission will obtain celebrated and obtain thru the regulatory system.”

GNL Québec Inc.’s Énergie Saguenay proposal perceived to had been shelved closing year. But after Russia’s invasion of Ukraine, hopes had been rekindled for exporting LNG from Quebec, no topic the genuine plans being rejected by the Quebec authorities and federally.

Remaining month, the Quebec authorities effectively banned oil and gasoline exploration in the province, so Énergie Saguenay’s slim possibilities proceed to hinge on acquiring natural gasoline from Western Canada.

Pieridae has vastly scaled aid plans for Goldboro LNG, switching to a proposed floating facility in area of a broad terminal that can had been built on land. Pieridae chief executive officer Alfred Sorensen acknowledged Goldboro LNG wishes Ottawa to intervene to aid obtain to the backside of complications associated to insufficient pipeline skill in Ontario and Quebec.

Pieridae is looking out for a monetary partner and expects to manufacture a final investment decision by the tip of 2022 on whether or no longer to press forward with Goldboro LNG.

“Canada would be lucky to acquire all the initiatives completed, but I obtain that’s going to be grand till a couple of of the transportation complications are resolved,” Mr. Sorensen acknowledged, even though it isn’t too tiresome for Canada to engage the subsequent LNG boat of opportunity.

“We in actual fact neglected the closing boat,” he acknowledged.

Your time is treasured. Maintain the High Replace Headlines e-newsletter with ease dropped at your inbox in the morning or evening. Price in at the sleek time.

Related Articles