Canadian Energy Centre
New deal with global gas giant Shell shows Canada is on the map for LNG: specialist
A worker at Shell’s Hazira LNG import terminal, about 250 kilometers from Mumbai, India. Photo courtesy Shell
From the Canadian Energy Centre
By Deborah Jaremko‘This is a signal that the LNG demand is viable beyond 2050’
A new 20-year deal by global energy giant Shell to purchase liquefied natural gas (LNG) from British Columbia is a sign Canada is becoming a player in global LNG markets, says an industry specialist.
Shell has agreed to buy two million tonnes of LNG per year from the proposed Ksi Lisims LNG project located near the Alaska border, which could start operating in 2028.
“Canada is on the map now for LNG. This is a signal that the LNG demand is viable beyond 2050,” says Racim Gribaa, president of Calgary-based Global LNG Consulting.
Gribaa has worked in energy for more than two decades, engaging with governments and industry on LNG developments around the world including Malaysia, the United States, Canada and Qatar.
Long-term LNG deals like the one struck by Ksi Lisims and Shell are hard to come by, he says, and are a sign that so-called LNG “portfolio players” trust the ability of Canada’s natural gas industry to deliver.
A portfolio player like Shell buys LNG from various suppliers and distributes it to buyers around the world – versus a buyer that purchases LNG solely for its own use.
“When portfolio players buy LNG, it’s not necessarily for a specific country. They can sell it anywhere they want,” Gribaa says.
“Canada’s west coast can enable them to sell cargo to efficiently meet demand in Asia without having to ship it all the way from farther locations. Instead of them shipping cargo from the Middle East, Europe, or from the U.S. thereby avoiding longer journeys around the Cape or going through the Strait of Hormuz or Panama Canal, instead they just send it straight from Canada to where they need it to go. It’s economically and logistically beneficial for them.”
Driven by expanding economies in Asia, world LNG trade has increased by more than 200 per cent since 2000, reaching 401 million tonnes in 2022, according to the International Gas Union.
Global natural gas use is rising, driving increased demand for LNG. The U.S. Energy Information Administration’s latest outlook projects natural gas consumption will rise to 197 quadrillion BTU in 2050, up from 153 quadrillion BTU in 2022.
In addition to the deal with Ksi Lisims owners including the Nisga’a Nation, Shell is also lead owner of the LNG Canada project, which is nearing completion at Kitimat, B.C.
The terminal will have capacity of 14 million tonnes per year when it starts up in 2025. The buyers of the exports from LNG Canada are its owners, including Shell and Petronas.
Shell’s decision to purchase LNG from Ksi Lisims could ensure it has plentiful supply available regardless of the timeline of the second phase of LNG Canada, Gribaa says.
“For a portfolio player, having options is valuable. We have enough demand globally to meet both Ksi Lisims LNG and LNG Canada phase 2, especially as coal is gradually faded out from Asia’s power mix,” he says.
“The only viable solution is to replace it with natural gas through LNG, as well as renewables, so the demand is forecast to be strong for several decades to come.”
Growing Canada’s LNG exports to Asia could reduce emissions by 188 million tonnes per year, or the annual equivalent of taking all internal combustion engine vehicles off Canadian roads, according to a 2022 study by Wood Mackenzie.
Down the coast from LNG Canada at Squamish, B.C. another major portfolio player is leaning on Canadian LNG.
BP Gas Marketing is the foundational customer for the Woodfibre LNG project, where early construction is underway.
Over a 15-year period, BP will purchase 1.95 million tonnes of the project’s 2.1 million tonne per year LNG capacity, and the remaining 0.15 million tonnes per year “on a flexible basis.”
“When you have such commercial commitments inked, it provides a future perspective on supply and demand, and perhaps most importantly it asserts the importance of Canada’s role in providing the world with a clean, affordable and secure long term LNG supply,” Gribaa says.
Canadian Energy Centre
Cross-Canada economic benefits of the proposed Northern Gateway Pipeline project
From the Canadian Energy Centre
Billions in government revenue and thousands of jobs across provinces
Announced in 2006, the Northern Gateway project would have built twin pipelines between Bruderheim, Alta. and a marine terminal at Kitimat, B.C.
One pipeline would export 525,000 barrels per day of heavy oil from Alberta to tidewater markets. The other would import 193,000 barrels per day of condensate to Alberta to dilute heavy oil for pipeline transportation.
The project would have generated significant economic benefits across Canada.
The following projections are drawn from the report Public Interest Benefits of the Northern Gateway Project (Wright Mansell Research Ltd., July 2012), which was submitted as reply evidence during the regulatory process.
Financial figures have been adjusted to 2025 dollars using the Bank of Canada’s Inflation Calculator, with $1.00 in 2012 equivalent to $1.34 in 2025.
Total Government Revenue by Region
Between 2019 and 2048, a period encompassing both construction and operations, the Northern Gateway project was projected to generate the following total government revenues by region (direct, indirect and induced):
British Columbia
- Provincial government revenue: $11.5 billion
- Federal government revenue: $8.9 billion
- Total: $20.4 billion
Alberta
- Provincial government revenue: $49.4 billion
- Federal government revenue: $41.5 billion
- Total: $90.9 billion
Ontario
- Provincial government revenue: $1.7 billion
- Federal government revenue: $2.7 billion
- Total: $4.4 billion
Quebec
- Provincial government revenue: $746 million
- Federal government revenue: $541 million
- Total: $1.29 billion
Saskatchewan
- Provincial government revenue: $6.9 billion
- Federal government revenue: $4.4 billion
- Total: $11.3 billion
Other
- Provincial government revenue: $1.9 billion
- Federal government revenue: $1.4 billion
- Total: $3.3 billion
Canada
- Provincial government revenue: $72.1 billion
- Federal government revenue: $59.4 billion
- Total: $131.7 billion
Annual Government Revenue by Region
Over the period 2019 and 2048, the Northern Gateway project was projected to generate the following annual government revenues by region (direct, indirect and induced):
British Columbia
- Provincial government revenue: $340 million
- Federal government revenue: $261 million
- Total: $601 million per year
Alberta
- Provincial government revenue: $1.5 billion
- Federal government revenue: $1.2 billion
- Total: $2.7 billion per year
Ontario
- Provincial government revenue: $51 million
- Federal government revenue: $79 million
- Total: $130 million per year
Quebec
- Provincial government revenue: $21 million
- Federal government revenue: $16 million
- Total: $37 million per year
Saskatchewan
- Provincial government revenue: $204 million
- Federal government revenue: $129 million
- Total: $333 million per year
Other
- Provincial government revenue: $58 million
- Federal government revenue: $40 million
- Total: $98 million per year
Canada
- Provincial government revenue: $2.1 billion
- Federal government revenue: $1.7 billion
- Total: $3.8 billion per year
Employment by Region
Over the period 2019 to 2048, the Northern Gateway Pipeline was projected to generate the following direct, indirect and induced full-time equivalent (FTE) jobs by region:
British Columbia
- Annual average: 7,736
- Total over the period: 224,344
Alberta
- Annual average: 11,798
- Total over the period: 342,142
Ontario
- Annual average: 3,061
- Total over the period: 88,769
Quebec
- Annual average: 1,003
- Total over the period: 29,087
Saskatchewan
- Annual average: 2,127
- Total over the period: 61,683
Other
- Annual average: 953
- Total over the period: 27,637
Canada
- Annual average: 26,678
- Total over the period: 773,662
Chief David Jimmie is president of Stonlasec8 and Chief of Squiala First Nation in B.C. He also chairs the Western Indigenous Pipeline Group. Photo courtesy Western Indigenous Pipeline Group
From the Canadian Energy Centre
Stonlasec8 agreement is Canada’s first federal Indigenous loan guarantee
The first federally backed Indigenous loan guarantee paves the way for increased prosperity for 36 First Nations communities in British Columbia.
In May, Canada Development Investment Corporation (CDEV) announced a $400 million backstop for the consortium to jointly purchase 12.5 per cent ownership of Enbridge’s Westcoast natural gas pipeline system for $712 million.
In the works for two years, the deal redefines long-standing relationships around a pipeline that has been in operation for generations.
“For 65 years, there’s never been an opportunity or a conversation about participating in an asset that’s come through the territory,” said Chief David Jimmie of the Squiala First Nation near Vancouver, B.C.
“We now have an opportunity to have our Nation’s voices heard directly when we have concerns and our partners are willing to listen.”
Jimmie chairs the Stonlasec8 Indigenous Alliance, which represents the communities buying into the Enbridge system.
The name Stonlasec8 reflects the different regions represented in the agreement, he said.
The Westcoast pipeline stretches more than 2,900 kilometres from northeast B.C. near the Alberta border to the Canada-U.S. border near Bellingham, Wash., running through the middle of the province.
It delivers up to 3.6 billion cubic feet per day of natural gas throughout B.C. and the Lower Mainland, Alberta and the U.S. Pacific Northwest.
“While we see the benefits back to communities, we are still reminded of our responsibility to the land, air and water so it is important to think of reinvestment opportunities in alternative energy sources and how we can offset the carbon footprint,” Jimmie said.
He also chairs the Western Indigenous Pipeline Group (WIPG), a coalition of First Nations communities working in partnership with Pembina Pipeline to secure an ownership stake in the newly expanded Trans Mountain pipeline system.
There is overlap between the communities in the two groups, he said.
CDEV vice-president Sébastien Labelle said provincial models such as the Alberta Indigenous Opportunities Corporation (AIOC) and Ontario’s Indigenous Opportunities Financing Program helped bring the federal government’s version of the loan guarantee to life.
“It’s not a new idea. Alberta started it before us, and Ontario,” Labelle said.
“We hired some of the same advisors AIOC hired because we want to make sure we are aligned with the market. We didn’t want to start something completely new.”
Broadly, Jimmie said the Stonlasec8 agreement will provide sustained funding for investments like housing, infrastructure, environmental stewardship and cultural preservation. But it’s up to the individual communities how to spend the ongoing proceeds.
The long-term cash injections from owning equity stakes of major projects can provide benefits that traditional funding agreements with the federal government do not, he said.
Labelle said the goal is to ensure Indigenous communities benefit from projects on their traditional territories.
“There’s a lot of intangible, indirect things that I think are hugely important from an economic perspective,” he said.
“You are improving the relationship with pipeline companies, you are improving social license to do projects like this.”
Jimmie stressed the impact the collaborative atmosphere of the negotiations had on the success of the Stonlasec8 agreement.
“It takes true collaboration to reach a successful partnership, which doesn’t always happen. And from the Nation representation, the sophistication of the group was one of the best I’ve ever worked with.”
Anti-Trump protests planned across the country on Saturday as LA violence continues
Telegram founder Pavel Durov exposes crackdown on digital privacy in Tucker Carlson interview
Carney’s Promise of Expediting Resource Projects Feels Like a Modern Version of the Wicked Stepmother from Disney’s Cinderella
