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    LNG Will Drive Canadian Gas Growth: Ceri

Summary

LNG to soak up 30% of Canadian production by 2039

by: Dale Lunan

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LNG Will Drive Canadian Gas Growth: Ceri

With the US export market all but lost to Canadian gas producers, domestic demand and the country’s nascent LNG export industry will be relied upon to drive demand growth through the next 20 years, the Canadian Energy Research Institute (Ceri) says in a new outlook report released July 23.

Domestic demand – almost, but not quite, offsetting the decline in net exports to the US – will increase by 2.5bn ft3/day between now and 2039, Ceri says, with 47% of that growth coming from the power generation sector as it moves off coal and 35% coming from the industrial sector, which includes the oil sands. Over the next six years or so, Canadian production will remain relatively flat at around 17bn ft3/day.

But it is LNG that will drive Canadian natural gas production sharply higher in the second half of the next decade, when the prospect of LNG exports from both coasts attract more growth-oriented investments to the moribund Canadian upstream gas industry, the outlook report says.

“Such a scenario will lead to a consistent increase in production until 2029, to levels slightly over 25bn ft3/day,” Ceri says. “Post-2029, production will stabilise through the remainder of the study period.”

Demand from the LNG sector, it says, will account for 30% of total Canadian natural gas production in 2039.

By 2029, the report says, an incremental 7.1bn ft3/day of western Canadian gas production will be supporting LNG exports from the Woodfibre LNG, LNG Canada and Kitimat LNG projects on the west coast and at least one – either Bear Head LNG or Goldboro LNG – on the east coast.