WGC: Canada Will Be a Major LNG Player, Mitsubishi Exec Says

WASHINGTON, DC - Despite having only modest ISO exports of LNG to China, Canada will join the likes of the US and Russia as a major global LNG player by 2040, an executive with Japan’s Mitsubishi - a partner in Anglo-Dutch Shell’s LNG Canada project - told the World Gas Conference here on June 27.

Addressing a morning panel session exploring the opportunities and challenges facing global LNG, Jun Nishizawa, Mitsubishi’s senior vice president and COO of its Energy Resources Division, said global LNG trade will reach an estimated 600mn metric tons/year (mt/yr) by 2040, with the top three players expected to be Qatar, the US and Russia, each of which he said will have in excess of 100mn mt/yr of liquefaction capacity by 2040.

“In Russia, the potential for Yamal growth is huge,” he said. In the US, meanwhile, growth in liquefaction capacity may face challenges surrounding the risk of Henry Hub gas prices, on which most US export projects are modeled, but the vastness of the resource is likely sufficient to overcome those challenges.

“When I talk about Canada, I am talking about west Canada, and west Canada is going to become very big in LNG in the future,” Nishizawa said. “This is very simple: the gas there is very cheap, and it is said that one-fourth of all the gas in North America is in western Canada.”

And with AECO prices currently well under US$2/mn Btu, western Canadian gas is very competitive with US supply sources, which are currently priced around US$3/mn Btu.

“Western Canada gas is also stranded - it is remote from markets - which helps it be even more competitive in the global LNG market.”