Canadian PM hints at helping LNG exports to Europe

Canadian prime minister Justin Trudeau, in the midst of German chancellor Olaf Scholz’s visit to the country on August 22, hinted that his government might be willing to ease the regulatory path for Canadian LNG exports to Europe, but added there still needs to be a business case for any of a number of possible projects to move forward.

Speaking with reporters in Montreal at a joint news conference with Scholz, Trudeau said the biggest problem with developing LNG in Atlantic Canada is the distance from gas fields in Alberta and BC, with little in the way of available pipeline capacity to move feed gas there.

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Canada is willing to “explore ways to see if it makes sense to export LNG, and if there’s a business case for it to export LNG directly to Europe,” Trudeau said, according to a Bloomberg report. “Economic conversations” are taking place on that subject between Canadian and German businesses.

“Easing the processes, because of the difficulty that Germany is facing, to make sure that we can move through regulatory hurdles more quickly, is something we’re willing to do,” he said.

But without enough pipeline capacity to move natural gas from western Canada to liquefaction facilities on the east coast – and the multi-jurisdictional challenges new pipelines would face – the near-term prospects for Canadian LNG exports to Europe remain dim.

Projects like Pieridae Energy’s proposed 10mn mt/yr Goldboro LNG project in Nova Scotia and a much-touted suggestion that Spain’s Repsol might convert its existing import terminal in Saint John, New Brunswick to an export facility would still have to overcome the pipeline hurdle if they were to eventually move off the drawing boards.

But a project that would need no pipeline connection to the west, and which could benefit greatly from an easier regulatory path, is the LNG Newfoundland & Labrador (LNG-NL) project, which would access as much as 8 trillion ft³ of stranded associated gas in the Jeanne d’Arc Basin to support onshore liquefaction facilities in Newfoundland. A 600-mile pipeline would move the gas to shore, providing about 400mn ft³/day of gas to feed a 2.5mn mt/yr floating liquefaction and storage facility in Placentia Bay.

In contrast to Trudeau’s remarks to reporters, an official communique from his office made no mention of discussions surrounding LNG. The focus of energy-related discussions, the statement said, was on clean energy, clean technology and global climate leadership.

“On energy cooperation, prime minister Trudeau reiterated Canada’s commitment as a key partner in addressing Europe’s energy needs now and in the years to come, including through strengthened cooperation on hydrogen and critical minerals,” the statement said.

Later on August 23, Trudeau and Scholz are to visit a hydrogen trade show in Newfoundland, where they are expected to lend their support to a plan by World Energy GH2 to produce hydrogen using power from more than 160 wind turbines that would be built near Stephenville, on Newfoundland & Labrador’s west coast.