CALGARY: Canada needs speedy development of liquefied natural gas (LNG) facilities and infrastructure or it will lose out to rivals in supplying Asian markets, Energy Minister Joe Oliver said on Wednesday.
A handful of companies are proposing new LNG plants on British Columbia’s Pacific coast to export gas from Western Canada’s massive shale-gas fields. While three projects have so far been granted export licenses, none have yet moved beyond the planning stage.
In an interview with Reuters, Oliver said the federal government is promoting Canadian LNG to Asian buyers attracted by the country’s political stability and vast gas reserves. But unless projects are completed in a timely manner, those customers instead will secure LNG supplies from rival projects in Australia, the US and elsewhere.
"We have to get on with it," Oliver said. "This is a market that will not be there forever. We have to move as quickly as we can to create the infrastructure to move the resources."
Oliver has been the Canadian government’s key spokesman for its push to find new markets for oil and gas beyond the US, which now takes nearly all of Canada’s energy exports.
That search has been spurred by low US prices for Canadian oil and a five-year wait for a decision from the Obama administration on the controversial Keystone XL pipeline project.
However, the minister said US and European investors are questioning whether Canada can push LNG projects in a timely manner because of regulatory impediments and the concerns over whether aboriginal communities in British Columbia will support construction of LNG projects and new pipelines.
"The issue of timeliness is very much a question," he said. "We're doing what we can."
The Canadian government has already taken controversial steps to speed regulatory reviews of energy projects and is reaching out to First Nations groups and communities to drum up support for energy projects, which Oliver said is having mixed results so far.
"We think that in respect to LNG there’s a higher level of acceptance" among British Columbian First Nations, he said.
"“But in respect to oil and gas there’s more work to be done."
Oliver’s remarks came as an influential former minister in the Conservative government also called for quicker development of LNG projects.
Jim Prentice, who resigned his industry portfolio in 2010 to become vice chairman of CIBC, said LNG producers need a royalty regime that encourages long-term development of the industry, as well access to sufficient supplies of skilled labour among other measures.
In the text of a speech delivered to a Calgary, Alberta, conference, Prentice urged federal and provincial governments, as well as LNG producers, to take steps to ensure the country’s nascent LNG industry can compete with new projects planned in the US.
"The Americans are eager to get into LNG in a big and aggressive way," Prentice said. "That could have real implications for our ability to do the same. If we’re hesitant, if we continue to move slowly, we could wake up to discover that our competitive opportunity has vanished."
Several LNG export plants have been proposed for British Columbia’s Pacific coast, including facilities planned by Chevron Corp, Royal Dutch Shell Plc, Malaysia’s Petronas and Exxon Mobil Corp.-- Reuters