LNG Canada Moves Closer to Launch

LNG Canada has received its first import cargo of liquefied gas that it will use for equipment testing as the facility nears completion, which is scheduled to take place later this year.

The Greece-flagged Maran Gas Roxana tanker arrived safely in Kitimat, LNG Canada said in a news release without specifying the size of the LNG cargo. “This activity is critical to our safe start-up and commissioning process in advance of our operations, and to achieving our first LNG export cargoes by the middle of 2025,” the company said.

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LNG Canada is a joint venture between Shell, with 40%, Malaysia’s Petronas with 25%, Mitsubishi Corp. with 15%, Korea Gas Corp. with 5%, and PetroChina with 15%. The facility, will process 1.9 billion cubic feet of natural gas per day—a significant chunk of Canada’s output. Once operational, the project is expected to boost Canadian natural gas prices, as supply that previously flowed south to the U.S. gets redirected to Asian markets.

LNG Canada is the country’s first project for the export of superchilled fuel, with a focus on Asian markets as the biggest demand driver. Eventually, however, Canada could potentially supply 36.2 million tons of LNG per year by 2040, according to estimates by Wood Mackenzie. That’s despite statements by the previous Canadian government that there was no business case for liquefied natural gas in the country. The statements were made in response to a request by the former German chancellor, Olaf Scholz, for potential LNG supply deals with Canada.

Right now, the business case for Canadian LNG just got a massive boost from President Trump’s tariffs, which hit allies and adversaries alike, prompting warnings of retaliation. Energy is one obvious target for such retaliation as already demonstrated by China, which retaliated against an earlier tariff slap by slapping back with its own tariffs on U.S. energy imports. Canadian LNG is an obvious alternative to U.S. LNG, should such an alternative become necessary.

By Irina Slav for Oilprice.com

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