CAPP: Canada needs global LNG markets for gas production growth

Canada needs to connect to global LNG markets to avoid a decade of decline in natural gas production, according to the Canadian Association of Petroleum Producers (CAPP).

In its 2015 gas forecast and LNG report, CAPP said US gas supplies are displacing western Canadian gas in the traditional markets of central Canada and the US Midwest and Northeast.

“Accessing the global LNG market can strengthen the long-term viability of Canada’s gas industry and backstop the significant economic benefits it creates for Canadians,” said Tim McMillan, CAPP president (OGJ Online, June 11, 2015).

Without access to global LNG markets to stimulate production of Canada’s gas supply, production will decline steadily over the next 10 years, then remain flat at about 13 bcfd until the end of the current forecast period in 2030, CAPP said.

Access to global LNG markets would enable Canadian production to recover to current levels of 14.5 bcfd by the end of this decade. As LNG export facilities are developed, gas demand to fuel the plants could raise production to 17 bcfd by 2030.

CAPP said Canada needs prompt regulatory approvals and a commitment to competitiveness to attract the billions of investment dollars required to build an LNG business and expand gas production to support it (OGJ Online, Apr. 30, 2015).

“Proposed LNG projects require timely political and regulatory decisions because global LNG competition is fierce and involves many well-established international suppliers,” McMillan said. “The window of opportunity for Canada’s LNG market will not stay open forever.”

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