In February 2015, Canada counted 22 LNG liquefaction plant projects – of which 17 are located in British Columbia – representing a total design capacity of 325 mmtpa.
Canada has the potential to become a major LNG exporter but no project has received Final Investment Decision (FID) so far. Competition with US brownfield projects with innovative business models have limited the commercial appeal of many Canadian projects relying on oil indexation. More recently, plummeting oil prices have put into question their profitability and lead to several postponements of FID reviews.
CEDIGAZ’s new report Waiting for the Next Train? An Assessment of the Emerging LNG Industry in Canada discusses the potential for Canada to export LNG, looking at the initial enthusiasm and wide support by public authorities and local communities but also at the economic challenges and commercial issues that are slowing the progress of these projects.
British Columbia (BC) projects appear to be especially capital-intensive. Indeed, many of those projects are planned on greenfield sites and, unlike their US competitors, have to bear the additional cost of upstream development in remote areas, with all the necessary transport infrastructure.
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