The fossil industry is gearing up for a new wave of multi-billion-dollar liquefied natural gas (LNG) plants, and the C$40-billion LNG Canada project in Kitimat, British Columbia is one of the biggest new developments on the list.
“We expect a supply gap in the gas market in the early 2020s,” Shell Chief Financial Officer Jessica Uhl said last month, so “LNG Canada looks very promising.”
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Reuters notes that “spending on new, complex facilities that super-chill gas into liquid in order to allow its transportation dried up following the collapse in energy prices in 2014. Appetite was further dampened by fears that a plethora of LNG plants built since the late 2000s would lead to a large supply glut until early in the next decade.”
However, “sentiment has radically changed over the past year. Buoyed by rising oil prices and exceptionally strong demand from rapidly growing economies such as China and India, executives are increasingly confident conditions are once again ripe for new projects.”
The world’s biggest source of LNG, Qatar, has plans to expand its production by one-third, to between 100 and 108 million tonnes per year, in the next five to six years, the news agency reports.
“The glut that people see, I don’t see,” Qatar Petroleum President and CEO Saad al-Kaabi said in May. “If you just count on being pessimistic about the market, and don’t build expansions, you will never catch that upside when the market is up.”
Reuters cites rising global demand, driven by China’s drive to cut air pollution by scaling back coal-fired generation, as the main factor driving new LNG demand of more than 200 million tonnes per year through 2030.
“China will continue to make the real difference in demand,” said Philippe Sauquet, the head of gas for Total S.A. “I don’t see them slowing down. They are shifting attention to building more and more infrastructure.”
“Investors were highly critical of oil and gas companies earlier this decade, as costs ballooned for many LNG projects under development such as Chevron’s US$54 billion Gorgon project in western Australia, the most expensive in history, or Shell’s $14 billion Prelude LNG, the world’s largest floating structure,” Reuters recalls. “But with services costs still languishing in the wake of the 2014 slump and new technologies helping to simplify and improve designs, new projects are able to compete for capital.” Fossil executives also say they’ve learned from their mistakes on past projects.
The story lists projects now under consideration in Mozambique, Nigeria, Senegal, and Mauritania, with the largest single share of new supply coming from shale gas deposits in the United States.
Last week, as well, Total announced that Russia’s massive LNG export facility on the Yamal Peninsula, of which the French multinational fossil is a 20% owner, had doubled its capacity, from 5.5 to 11 million tons per year. Chair and CEO Patrick Pouyanné called it “another major milestone for this world-class LNG project.”
Nice to see LNG get on the greenwashing bandwagon. LNG is hardly a clean fuel and the environmental costs are almost as destructive. The LNG projects in northwest BC ..Kitimat, Prince Rupert are likely going to destroy salmon spawning grounds, fisheries in the Douglas Channel and Skeena River. Just another “last gasp” for the big payoff by oil and gas, with the connivance of provincial and government toadies. Wonder what kind of corporate welfare they will be getting from the taxpayers?