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Canadian gas exports expected to drop

Even with the addition of LNG, demand at home will draw on supplies, study finds.

By Daniel J. Graeber
Canadian gas exports expected to drop
Exports of natural gas from Canada could drop off heavily even with the addition of LNG port facilities, a national energy agency said. File photo by Stephen Shaver/UPI | License Photo

CALGARY, Alberta, June 16 (UPI) -- Even with the addition of exports of liquefied natural gas, exports from Canada are expected to drop off substantially in the years ahead, a regulator said.

Canada relies heavily on the North American market for exports. With Asian economic growth outpacing that of North America, the government is keen on tapping into new foreign markets for gas with port facilities like Kitimat in British Columbia.

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In January, the National Energy Board gave its consent to LNG Canada Development Inc. for an export license with a maximum capacity of 52.7 trillion cubic feet of natural gas from Kitimat, one of the first licenses of its kind approved by the Canadian energy regulator.

The NEB said exports of LNG are slated to begin in three years at an initial volume of about 500 million cubic feet per day, but increase to 2.3 billion cubic feet by 2023.

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"LNG export volumes are a key driver of natural gas production, which increases from 15.1 billion cubic feet per day in 2015 to 17.9 billion cubic feet per day by 2040," an NEB report found. "However, this production growth is more than offset by growing domestic demand for natural gas."

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According to a reference case projection from the NEB, net pipeline exports of natural gas from Canada could "essentially" vanish by 2040.

A final decision on Kitimat LNG facilities in British Columbia is expected later this year. The provincial economy could get a lift nevertheless from natural gas, in contrast to an economy like Alberta's that relies heavily on oil for revenue.

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The provincial economy for British Columbia, however, could face headwinds because of fluid prices for LNG. Canada's energy plans, meanwhile, have frustrated First Nations that are concerned the development of oil, gas and associated infrastructure may harm the ecosystems upon which they depend.

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