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‘We have a lot of advantages, but we also have a window of opportunity. If we don’t capture this in the next three to five years, others will fill that gap,’ Pembina Pipeline Corp. CEO Scott Burrows said
Handout photo of liquefaction module, arriving at Squamish Woodfibre LNG site in Squamish, aboard specialized heavy cargo vessel Red Zed 1. Photo by Oisin McHugh /Handout photo courtesy of Woodfibre LNG
There are plenty of choices today at the Canadian energy buffet, and while much of the public appetite focuses on building oil pipelines west or south, developing new LNG export facilities is also squarely on the table.
With regulatory reforms progressing on building major projects, a new federal-provincial accord in place and ongoing efforts to turn the country into an energy superpower, Canadian business executives say it’s time to seize the moment and build on the momentum.
It’s also a chance for Canada to catch up on further developing an industry to export more liquefied natural gas to an energy-hungry world.
“We have a lot of advantages, but we also have a window of opportunity. If we don’t capture this in the next three to five years, others will fill that gap,” Pembina Pipeline Corp. CEO Scott Burrows told an energy conference in Calgary on Thursday.
“If you look at the number of proposed LNG projects across the world, whether it’s in the Middle East or in the U.S., the time is now. And if we don’t act, we are going to lose this generational opportunity.”
Calgary-based Pembina is a partner with the Haisla Nation on the Cedar LNG project being built on the Pacific Coast.
Burrows was one of several industry CEOs who spoke at the annual Energy Roundtable conference, where much of the conversation focused on the recent shift in federal policy — and a change in attitude — toward getting energy initiatives built.
The conversation is unfolding after the high-profile memorandum of understanding (MOU) on energy policy between the Alberta and federal governments was signed in November.
Earlier this month, a followup federal-provincial agreement was reached on increasing the province’s industrial carbon price, while also establishing timelines to advance Alberta’s proposal for a new West Coast bitumen pipeline.
Meanwhile, Ottawa and the B.C. governments are voicing support for LNG developments that will send more supercooled gas to international markets.
“We are seeing the momentum from the government, we’re seeing the momentum from industry. I think it’s providing a climate to start dusting off some of the studies and some of the engineering, and start to advance that,” Burrows told reporters at the event.
Scott Burrows is president and CEO of Pembina Pipeline. Supplied
The country’s first major LNG export facility — the Shell-led LNG Canada project — began operating last summer, sending gas to Asia. Its partners are now considering a major expansion, while Cedar LNG and the Woodfibre LNG projects are being built on the Pacific Coast.
The war in the Middle East has also increased the focus on global energy security of supply.
Earlier this week, the federal government announced that a state-owned German energy firm has agreed to purchase up to one million tonnes of LNG annually from the proposed Ksi Lisims project in northwest B.C.
Canada has ample natural gas reserves in the Montney to increase production, and the country can offer significantly shorter shipping times to get product to market than from LNG terminals on the U.S. Gulf Coast.
Luke Schauerte, CEO of Woodfibre LNG, which is developing its project southwest of Squamish, B.C., noted that work is now 65 per cent complete. He expects to finish construction sometime next year.
“We are at a critical moment in time where we could actually really open up what is possible,” Schauerte said of the sector’s growth, noting other countries such as the U.S. and Qatar are looking to continue to increase production.
“I think we have a moment to actually become that energy superpower and ultimately become one of top five LNG sector producers.”
Speaking at the forum, Scotiabank CEO Scott Thomson agreed there’s been a “massive change” from the federal government on energy policy.
“More has to be done, but my sense is there is something to this grand bargain,” he said.
“I think probably the next step forward is we’re going to have to come to an agreement on production, carbon capture and on pipelines, and if we can do all that together, that’s a pretty encouraging vision for us.”
Oil pipelines were also a focus of Thursday’s discussion.
Plans for expanding the existing Enbridge and Trans Mountain oil pipeline systems continue to advance, while Alberta is proposing a West Coast line.
Calgary-based South Bow is looking to send more oil south through pipe that was previously built in Canada for the Keystone XL system. It would connect with a U.S. line being proposed by Bridger Pipeline LLC, taking Canadian oil to Guernsey, Wyo.
Pipeline operators note there needs to be more production to fill the new lines. Petroleum producers have pushed back against the higher industrial carbon price contained in the MOU.
“When it comes to the carbon tax, the reality is while it’s better than it was before, that is an uncompetitive cost on our industry,” Imperial Oil CEO John Whelan told the conference.
The market will judge the carbon tax and Canada’s regulatory process changes, said other speakers.
“We’re all going to get some market therapy,” said Adam Waterous, executive chair of Calgary-based Strathcona Resources.
“All these (investment) folks in New York won’t be shy, and they will either thumbs up or thumbs down.”
Chris Varcoe is a Calgary Herald columnist.
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