Exporting LNG, a very risky bet for Canada according to Ember

Exporting LNG, a very risky bet for Canada according to Ember
Exporting LNG, a very risky bet for Canada according to Ember

Canada currently has seven infrastructure projects to export liquefied natural gas (LNG). This is at odds with the country’s climate goals and comes with many other risks, according to a note from Ember published on July 9.

A global demand ” uncertain »

Global gas consumption could peak by the end of the decade, according to the International Energy Agency’s (IEA) “STEPS” business-as-usual scenario based on policies announced to date.

Ember even mentions a ” global gas supply glut by 2025-206, when the first of Canada’s new LNG export projects comes online ” and assures that the growth of liquefied natural gas infrastructure in the world is excessive compared to needs.

Consumption in the European Union, the world’s largest market for LNG (134 billion m3 of imported gas in liquefied form in 2023), could in particular reach a peak in 2024 according to the Agency for the Cooperation of Energy Regulators (ACER). Ember assures among other things that Italy no longer needs its planned LNG terminals.

Canadian LNG uncompetitive?

Ember also questions the competitiveness of Canadian liquefaction plants compared to other countries, starting with the United States, the world’s leading exporter of LNG: “ According to an ST Energy executive speaking at a recent conference, an offshore project in the Gulf of Mexico would cost nearly $700 per tonne of LNG, compared to $3,400 per tonne of Canadian LNG. » ($2,400 for the Woodfibre LNG site).

The risk of “stranded assets” – increasingly mentioned for new projects concerning fossil fuels – would thus be ” tangible and growing ” for Canadian LNG, in Ember’s words.

Ember also points out that LNG exports could increase the price of gas for Canadians. And that the seven LNG projects underway in the country, all located in British Columbia, could add 43 TWh of annual electricity consumption in the province, equivalent to 69% of all electricity demand in British Columbia in 2022.

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