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    New Study Pegs BC LNG Impact at C$500bn [UPDATE]


Nearly 100,000 new jobs would be created each year, report says; Updates with Alberta ministerial comments

by: Dale Lunan

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New Study Pegs BC LNG Impact at C$500bn [UPDATE]

A new briefing paper from the Conference Board of Canada suggests that the economic impact from the development of 56mn mt/yr of LNG export capacity in BC could trigger investments of more than C$500bn (US$374bn) between 2020 and 2064.

The issue briefing, entitled A Rising Tide: The Economic Impact of BC’s Liquefied Natural Gas Industry and funded by the Canadian LNG Alliance, suggests that Canada’s GDP would increase by about C$11bn/yr over the 24-year period, with BC’s portion accounting for about C$8bn/yr of that total. National employment would increase by 96,550 jobs annually over the period, with 71,000 new jobs annually in BC – a 3% increase in total provincial employment from May 2020.

“Post-pandemic, the Canadian economy will need stimulus,” the report says. “An LNG industry brings long-term investment and production that can contribute to the country’s economic recovery.”

In a later statement, Dale Nally, Alberta’s associate minister of natural gas, said LNG developments in BC would contribute C$1.6bn annually to Alberta’s GDP and add 10,000 permanent jobs to the province’s workforce.

Alberta, he said, continues to work with other governments, with industry partners and with indigenous communities to identify ways to cut regulatory red tape, increase pipeline access and get “new and innovative” infrastructure built to reach Canada’s coastlines. And part of its focus, he said, will be on the province’s gas industry.

“As part of Alberta’s Recovery Plan, our government will soon announce details of our natural gas vision and strategy – a plan that outlines how Alberta will act on the significant LNG opportunity that exists for our province, as well as supporting sectors like petrochemical manufacturing and plastics recycling.”

The 56mn mt/yr of LNG export capacity referenced in the Conference Board report comprises the complete four-train, , 28mn mt/yr LNG Canada project near Kitimat, the first two trains of which are already under construction; a nearby 18mn mt/yr project (the proposed Chevron/Woodside Kitimat LNG terminal, with construction beginning in 2024); a 4mn mt/yr LNG facility in northwest BC, to begin in 2024; a 2.1mn mt/yr facility in BC’s Lower Mainland (the Woodfibre LNG project under development near Squamish, north of Vancouver), and a 4mn mt/yr facility in the Lower Mainland (the expansion of the Tilbury Island LNG facility near Vancouver proposed by FortisBC).

Additional investments to support the LNG projects include the C$6.6bn Coastal GasLink pipeline to connect the LNG Canada project to gas supply in northeastern BC, the Pacific Trail Pipeline that would deliver gas to the Kitimat LNG project, incremental upstream drilling and midstream processing capacity to provide feedstock for liquefaction, and construction, starting in 2024, of a 500-kv electricity transmission line from Prince George to the northern coast of BC.

The bulk of the estimated annual direct spend by the LNG industry of C$11bn would be directed towards the upstream – C$6.1bn in BC and C$8.5bn nationally – with LNG terminal construction and operations adding C$1.14bn and C$993mn, respectively, to Canada’s annual GDP.

“Annual spending in the LNG sector of this magnitude would far exceed the average annual spending in recent years by many of BC’s existing industries,” the briefing paper says. “On an annual basis, the LNG [industry] under this scenario is forecast to spend as much as BC’s three largest industries combined spent annually on average over the past 14 years.”