World demand for LNG increasing

Canada is well positioned to take advantage of growing world markets for liquefied natural gas, a Canadian Association of Petroleum Producers symposium heard today, but the stakeholders—oil companies and governments—must act while the window of opportunity is open.

Partnerships with China, Japan and Korea are becoming more common to develop shale gas in BC, estimated to be in the trillions of cubic feet, and export it to the world. The potential is there to sell to offshore customers, as well as to North American markets.

According to some estimates, the Horn River Basin contains more gas than the entire province of Alberta.

Encana Corp. already has multi-billion-dollar deals with Petro China, Kogas and China National Petroleum Corp. to develop unconventional gas, as well as being a partner in the development of a proposed LNG terminal at Kitimat, BC.

The vice-president of Encana believes that North America "can support a lot of liquefaction." His hope is for a world price for natural gas, similar to the world price for oil.

LNG is emerging as a fuel of choice for the maritime industry. It is also logical for internal combustion engines to move to LNG, in part to help meet tougher government emissions standards. Power utilities too are looking at LNG in favour of coal and nuclear power.

The two biggest issues facing LNG producers are volatile pricing and reliability of supply.  When these are wrestled to the ground, the future of gas seems bright.