Canada’s LNG industry set to take flight as U.S. eyes Alaska project

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Calgary – Hundreds of kilometers on the Pacific coast, a monster is dormant from Canada’s first LNG export terminal will begin this summer.

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Alaska has long had the ambition to transport natural gas to international markets, but the cost and scale of the cause have taken it back for decades.

But new interest has emerged in large projects since President Donald Trump issued an executive order on the first day of his office’s commitment to Alaska resource development. State officials, including Gov. Mike Dunleavy, have been busy in recent weeks trying to attract potential buyers of Asian gas under long-term contracts.

Industry experts doubt whether the Alaska Behemoth will wake up this time, but they say Canada must be aware of the threats it could pose to its nascent LNG industry.

“If you have time to build it, it might be your best choice now,” said Josephine Mills, a senior analyst at Enverus, of the Trump administration’s control of Alaska gas and Republicans’s congressional control.

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“But then again, this has been talking about for the last 30, 40 years. It’s by no means a new project. So I definitely think that there will be a lot of obstacles.”

With an estimated price of $44 billion, Alaska LNG will see a 10,300-km pipeline from north to south to south across the state, passing through dangerous terrain, with an average of 3.5 million MMBTU of gas being supplied to Nikiski’s Liquefaction plant, located in Nikiski, in Anchorage. The project also includes a carbon capture plant in gas fields on the north slope of Alaska.

Some gas will be targeted at the demand of Alaskas, but most of the gas will be loaded onto tankers and sold throughout the Pacific, and Canadian LNG developers want to take advantage of it.

“It is good for Canada to not build Alaska LNG,” Mills said.

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But if it does continue – if it’s a big one, it’s after 2030.

In the second half of last month, Alaska Gasline Development Corp., the national company behind the massive effort, signed the Glenfarne Group as the lead developer of the project. U.S. energy infrastructure builder Glenfarne now owns 75% of the project, and AGDC owns the rest.

It is expected that there will be some time this year to make a final investment decision on Alaska LNG.

Contracts to buy LNG are signed before the plant starts, usually spanning several years, said Kent Fellows, an economist at the University of Calgary School of Public Policy.

As a result, Trump’s trade chaos released a series of tariffs on one allies, which would not help the Alaska project.

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“If you’re not sure if trade relations will remain stable, making some of these investments can be really expensive,” Fellows said.

“Until about 12 months ago, one of the huge advantages the United States had (IS) they had with a very stable economic reputation, an economy that believed in global free trade.”

If Alaska LNG has somehow successfully contracted with Asian buyers, it will be harder for the BC project to develop to ensure adequate demand to justify its own plant.

“Through the LNG market, this competition occurs when the facility is built, so the timing of the market can be very important,” Fellows said.

But the CEO of Canada’s largest natural gas producer said there should be a lot of interest.

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Mike Rose, who is in charge of Tourmaline Oil Corp., expects global demand to reach 50 million MMBTUs by 2035.

“We are not oversupply because there might be a project for Alaska,” he said. “We need all of that.”

TC Energy CEO Francois Poirier said in a speech to the Canadian Club in Toronto last week that he hopes to see a “Canadian Team” approach to developing LNG.

TC Energy has built a pipeline to ship natural gas across the LNG Canadian terminal in British Columbia to Kitimat.

“In Alaska, the U.S. government is working today to sign a signing of liquefied natural gas with countries such as Japan and South Korea (MoU)” Poirier said.

“The governor of Alaska has traveled to Asia to line up for Alaska LNG customers and investors and guess what? He returns from the trip with Taiwan.”

Poirier said that no matter which party wins the April 28 federal election, it will be key to a similar degree of consistency with the United States for prime ministers, prime ministers, corporate and indigenous leaders.

“Overall, we have to go to Asia, sell ourselves and emphasize that Canada is back on business, which is a good risk.”

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