Canadian LNG has potential to meet growing Asian demand

Speaking at the LNG2023 conference, Dulles Wang, Director, Americas Gas & LNG at Wood Mackenzie, said that with the alignment of several market dynamics, Canada has the potential to meet growing Asian demand for LNG.

Currently, the US and Qatar account for 40% of global LNG supply. With their abundance of supply, infrastructure and commercial partnerships, Wood Mackenzie forecasts their combined market share to exceed 60% by 2040. The US will continue to cement its position as the largest LNG supplier in the world, building on the record-breaking commercial momentum from 2022.

Wang commented: “There will certainly be challenges in building our new LNG capacity in Canada, but the country has much in its favour and could play a larger role in meeting global demand in the near future, especially in Asia. Canada could be well-positioned due to its strategic location for shipping advantages to Asia, support from Canadian First Nations, and forward-thinking emissions regulations.”

Underpinned by LNG demand growth, Wood Mackenzie projects that another 100 million tpy of capacity of LNG will be required to meet demand growth by the mid-2030s, a 25% uplift compared to current supply, and in addition to projects that are currently under construction. Much of this demand will be in Asia, where China and several other emerging economies are looking to rely more heavily on gas as they switch away from coal.

Wang added: “Sustained LNG demand in Asia will drive new opportunities in the market and Canada is well-positioned to capitalise. It does have challenges, as construction costs are high for new pipelines, but support from First Nations will be critical to secure social license, and the potential is quite high. Canada can produce LNG with some of the lowest emissions intensity in the world thanks to its access to hydroelectricity, emissions regulations and goals. Countries that are looking for low emissions resources to meet their own climate goals will be attracted to this supply. Cost of LNG shipping is spiraling northwards with the emission intensity of the LNG fleet coming under intensified scrutiny. The shipping advantage for Canada to Asia increases substantially if ships from the US Gulf Coast need to go the long way around to reach the Asian market, due to rising congestion at the Panama Canal.”

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/14072023/canadian-lng-has-potential-to-meet-growing-asian-demand/