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“The window is closing down.” So believes Thierry Bros, one of Europe’s and the world’s leading experts in natural gas, about British Columbia’s ability to build a liquefied natural gas industry.
If Mr. Bros, who was recently in Ottawa, is correct, then British Columbia risks arriving too late for the world’s LNG party. LNG projects are proceeding in Australia, the United States and elsewhere. In B.C., they face regulatory delays, long negotiations with aboriginals that sometimes go nowhere and rising costs.
The world is not waiting on British Columbia. A liquefaction plant will shortly open in Texas, bringing to five the number of LNG export facilities operational or being built in the United States. Federal regulators have received applications for 15 more. Further projects are in the planning stage. This explosion of activity relates partly to increasing world demand and partly to the U.S. shale gas revolution, which has boosted natural gas production by more than eightfold in five years.
Seven LNG facilities have received final investment decision (FID) in Australia, which is set to be the world’s largest LNG exporter by 2018. Aussie gas will arrive in Asia, which is where B.C. would like to send its gas.
Africa is expanding its production, although the lack of rules and infrastructure will slow development down in Tanzania and Mozambique. Argentina has huge reserves, but that country’s crazy currency rules and Peronista-type government will hamper development. Russia, of course, has enormous reserves and has signed two large gas export deals with China that could represent about 17 per cent of that country’s demand.
Malaysia and Indonesia are large gas producers, so they cannot be Asia markets for B.C.’s LNG. Japan and South Korea could be, but those countries will not be willing to pay any premium prices for LNG with so many supplies coming on stream. Japan will get some of its nuclear reactors running again after the Fukushima disaster, thereby reducing the temporary upsurge in demand for gas. A good LNG market might be India, but Qatar and Africa are both closer to India than B.C.
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