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Canada needs new gas markets

June 12, 2012 at 7:07 AM   |   Comments

OTTAWA, June 12 (UPI) -- With Royal Dutch Shell leading the LNG race in Canada, at least one investment analyst questioned why it was taking so long to tap into new export markets.

Shell in May announced it teamed with Korea Gas Corp., Mitsubishi Corp. and PetroChina Co. Ltd. to propose a liquefied natural gas export hub in western Canada in an effort meant to reach Asian markets.

The shale gas boom in the United States means lower North American demand for natural gas from Canada. Investment analysts told Bloomberg News that western Canadian ports could accommodate at least two LNG projects.

"You've got a situation of low gas prices and sluggish demand in North America," John Stephenson, a director at First Asset Investment Management Inc. in Toronto, told Bloomberg.

"It begs the question why we aren't doing more to get it out the door."

Marvin Odum, upstream director for American operations at Royal Dutch Shell, told a meeting of the Canadian American Business Council this week that the tapping into Asian markets for LNG could be "worth billions of dollars" for Canada.

Investors told Bloomberg that Shell has "deep pockets" that gives it an advantage over rival energy companies working in Canadian natural gas markets.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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