Future of LNG 2015

_Future of LNG 2015

Canada’s emergence as a global energy exporter is at hand.  By the end of this decade, Canadian oil and liquefied natural gas (LNG) should begin to flow away from the increasingly saturated US market to offshore markets, primarily in the high growth Asia-Pacific region.

Despite this, two or more BC LNG projects will likely be built-eventually.  The core challenge is whether the industry timetable matches the needs of the BC and Alberta governments. The BC government has promised a lot to the public on the fiscal windfall from LNG, promises that were premature and under-estimated the price sensitivity of these projects and the availability of alternative investment destinations.

Regardless of the uncertainties, and especially in the longer-term, Canada’s oil sands and gas reserves are too valuable to leave in the ground and failure to find some route to market would be a failure of both public policy imagination and market forces of epic proportion. What underpins this view is a world in which strategic, world scale oil development opportunities are in short supply, regardless of prices, while petroleum demand continues to grow, albeit not at the torrid rates of 2002-2008.

The attached LNG Update shows evidence that billions of dollars are already being spent and we are stepping closer and closer to hearing an announcement.  The last couple months have been a flurry of good news, especially last week.  It's only a matter of time.