Business

Natural gas industry growth hinges on LNG: CAPP

The organization representing Canada's oil and gas industry is warning natural gas production will decline in the next decade without the construction of any new export facilities.

Forecast calls for better access to global LNG market

Natural gas industry risks decline in the next decade without any LNG export terminals 1:40

The organization representing Canada's oil and gas industry is warning that natural gas production will decline in the next decade if no new export facilities are constructed.

The Calgary-based Canadian Association of Petroleum Producers said Canada needs access to global liquified natural gas markets to help stimulate the industry.

More than a dozen LNG projects are proposed in B.C., but analysts expect only a few to actually be constructed.

"Accessing the global LNG market can strengthen the long-term viability of Canada's natural gas industry and backstop the significant economic benefits it creates for Canadians," said CAPP chief executive Tim McMillan in a release.

Canadian natural gas production is about 14.5 billion cubic feet per day and could fall to 13 Bcf/day in the next ten years. According to CAPP, production could rise to 17 Bcf/day by 2030 if LNG export facilities are developed.

"The window of opportunity for Canada's LNG market will not stay open forever." said McMillan.

Debate over LNG in B.C.

This week, B.C. politicians started debating a $36-billion LNG agreement which the Liberal government claims will lay the groundwork for the province's future. The government needs legislative approval to enter into an agreement with Pacific NorthWest LNG, a consortium led by Malaysian energy giant Petronas. The company is proposing an export terminal near Prince Rupert.

The project would face a number of hurdles, including opposition from native groups who could take their fight to the courts.

Iain Black, CEO of the Vancouver Board of Trade, told CBC News he was "increasingly confident" that some of the LNG facilities will actually be built. "The government has done more than talk the talk on this, they have laid the groundwork, they are ready to move forward."

Spanish energy company Repsol has also applied to convert New Brunswick's Canaport LNG plant may be converted into an export terminal.

"We have more [natural gas] than we need," said Adam Legge, an economist and CEO of the Calgary Chamber of Commerce. "If we can't get that product to other markets, we are going to simply be dialling back production, investment. That's unfortunate because it means a reduction in jobs and spending here in Canada."

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