Canada Ships Natural Gas to Asia, Broadening Its Market
By Jingwei Zhao
The Gaslog Glasgow tanker has made the first and pivotal natural gas shipment from a leading Canadian plant to South Korea. As a result of President Trump’s trade war and threats of annexing Canada to become America’s 51st state, the country has been seeking to expand and broaden its export markets.
This voyage to Asia marks a major milestone for Canadian trade. On the day of the tanker’s release, Canada’s Prime Minister Mark Carney stated, “Canada has what the world needs. By turning aspiration into action, Canada can become the world’s leading energy superpower.” Mr. Carney has revealed that Project LNG Canada, including all its assets, is worth $ 48 billion Canadian dollars, or roughly $ 35 billion USD. LNG stands for liquefied natural gas, and the mission of the joint venture company, LNG Canada, is to develop an LNG export facility.
The tanker’s voyage occurred during tensions over energy production as Trump implemented many tariffs. The LNG Canada export facility is located in Kitimat, British Columbia. Despite the successful shipment, the oil-rich province of Alberta already has further demands.
The province wants more ports and more pipelines running through British Columbia to continue globalizing its oil and gas market. However, British Columbians who resist tanker traffic or pipeline expansion in their mountains are against Alberta’s approach. Environmentalists have argued that the exportation of natural gas contradicts Canada’s responsibilities in combating climate change, as natural gas can release methane, a potent greenhouse gas, through leaks. The indigenous people are also opposed to a federal law accelerating the approval rate of pipelines in their region.
Since the majority of Canada’s oil and gas flows south, it sold around $6 billion worth of natural gas to the United States in the past year. However, increases in America’s gas production have led the U.S. to become the world’s largest liquified gas supplier, diminishing the amount of Canadian exports since 2010. Exports to Asia enable Canadian companies to finally raise prices for natural gas to match those in the North American market.
According to the University of Calgary’s energy economist Professor Kent Fellows, “Mr. Trump’s tariffs and disregard for trade agreements have made nations ‘more skeptical’ about the stability of long-term U.S. trading relationships.” This means the chances that Canada will seek more markets are increasing.
Shell is currently the largest shareholder in LNG Canada, and they predict that Canadian natural gas will become the new standard for generating electricity. Cederic Cremers, an executive in Shell’s natural gas division, explained that the company expects their biggest contribution to the energy transition over the next decade will be from supplying LNG.
Demand for LNG is increasing in many countries, including China. However, a poor environmental record during the pipeline’s construction has raised concerns from environmentalists. The LNG project has some risks, such as the potential for potent greenhouse gas methane to leak, improper erosion, and the need for sediment control measures. Although many indigenous communities support the project and are partnered with LNG Canada, some communities are divided, resulting in protests and conflict with the police. For example, some members of the Wet’suwet’en First Nation opposed having a pipeline running on their land, and they blockaded a road in 2021. Police were involved, and in January, three protestors were convicted of contempt of court.
Despite setbacks, LNG Canada is still expected to double the capacity of the Kitimat plant and continue expanding their project.
