Canadian Energy Centre
Mexico leapfrogging Canada on LNG and six other global oil and gas megaprojects
By Deborah Jaremko of the Canadian Energy Centre Ltd.
Major investments in countries like the United States, Norway, Qatar and Saudi Arabia are being made to meet world demand
New major oil and gas megaprojects around the world are proceeding amid concern about underinvestment in conventional energy leading to painful supply shortages.
“The energy future must be secure and affordable, as well as sustainable,” said Daniel Yergin, vice-chairman of S&P Global, earlier this year.
“Adequate investment that avoids shortages and price spikes, and the economic hardship and social turbulence that they bring, is essential to that future.”
Even if oil and gas demand growth slows, a cumulative $4.9 trillion will be needed between 2023 and 2030 to prevent a supply shortfall, according to a report by the International Energy Forum and S&P Global Commodity Insights.
Major investments in countries like the United States, Norway, Qatar, Saudi Arabia and Mexico are being made to meet world demand.
Meanwhile, due to regulatory uncertainty and concerns over proposed policies like an emissions cap for oil and gas production, Canada’s vast resources – produced with among the world’s highest standards for environmental protection and social progress – are being left behind.
Here’s a look at just a handful of global oil and gas megaprojects, listed in rising order of development cost.
Mexico: Altamira LNG
US$1 billion
New Fortress Energy
Mexico is leapfrogging over Canada to become an LNG exporter.
While Canada’s first LNG export project is expected to start operating in 2025, Mexico’s could come online this August – less than 10 months after Mexico’s government finalized a deal with U.S.-based New Fortress Energy to make it happen.
While relatively small at 1.4 million tonnes of LNG per year (LNG Canada’s first phase will have capacity of 14 million tonnes per year), under Mexico’s agreement the Altamira site is to become an LNG hub.
New Fortress Energy is to deploy multiple same-sized floating LNG units to produce LNG from natural gas transported through TC Energy’s Sur de Texas-Tuxpan pipeline.
An existing LNG import terminal at Altamira is also expected to be converted into a 2.8-million-tonne-per-year export facility.
United States: Willow Oil Project
US$8 billion
ConocoPhillips
The U.S. government granted approval this March for the giant Willow oil project on Alaska’s North Slope to proceed.
The project, owned by ConocoPhillips, is designed to produce 180,000 barrels per day at peak and operate for 30 years. It includes a processing facility, operations centre, and three drilling sites.
The Willow leases are inside the National Petroleum Reserve – Alaska, which was established in 1923 as an emergency oil supply for the U.S. Navy. It is now administered by the U.S. Bureau of Land Management.
Willow would occupy about 385 acres (around half the area of Central Park in New York City) in the northeast portion of the 23-million-acre reserve. It is expected to deliver nearly US$9 billion in government revenue, creating about 2,500 jobs during construction and 300 long-term positions.
ConocoPhillips has yet to make a final investment decision, but is anticipating starting production in 2029, according to the Anchorage Daily News.
United States: Golden Pass LNG
US$10 billion
QatarEnergy, Exxon Mobil
Golden Pass LNG is one of four natural gas export terminals under construction on the U.S. Gulf Coast as the United States continues to build its platform as an LNG powerhouse.
With about 90 million tonnes per year of LNG export capacity today, analysts with Wood Mackenzie expect that if current momentum continues, another 190 million tonnes per year could come online by the end of this decade.
The US$10-billion Golden Pass project owned by QatarEnergy and Exxon Mobil will have three production trains with total export capacity of about 18 million tonnes of LNG per year.
The U.S. began exporting LNG in 2016 and has since built more LNG capacity than anywhere else in the world, according to the U.S. Energy Information Administration.
First LNG exports from Golden Pass are planned for 2024.
Norway: Njord Field Restart
US$29 billion
Wintershall Dea, Equinor, Neptune Energy
Norway has officially reopened a major offshore oil and gas field, with the goal to extend its life beyond 2040 and double its total production.
Nearly US$30 billion in upgrades to the Njord project’s production platform and offloading vessel started in 2016, after nearly 20 years of operations. It was originally only expected to run until 2013, but improvements in recovery technology have opened the door to accessing substantially more resources.
Production restarted in December 2022, just in time to help address Europe’s energy crisis.
“With the war in Ukraine, the export of Norwegian oil and gas to Europe has never been more important than now. Reopening Njord contributes to Norway remaining a stable supplier of gas to Europe for many years to come,” Norway’s oil and energy minister Terje Aasland said in a statement.
The project will drill 10 new wells and tie in two new subsea oil and gas fields, with the work expected to add approximately 250 million barrels of oil equivalent to the European market. Partial electrification of equipment is expected to reduce greenhouse gas emissions.
Qatar: North Field East LNG expansion
Qatar Energy, Shell, TotalEnergies, Eni, Exxon Mobil, ConocoPhillips, Sinopec
US$29 billion
The largest LNG project ever built is underway in Qatar.
State-owned QatarEnergy’s US$29 billion North Field East Expansion will increase the country’s LNG export capacity to 110 million tonnes per year, from 77 million tonnes per year today. Startup is planned in 2025.
A planned second phase of the project will further increase capacity to 126 million tonnes per year.
World LNG demand reached a record 409 million tonnes in 2022, according to data provider Revintiv. It’s expected to rise to over 700 million tonnes by 2040, according to Shell’s most recent industry outlook.
Saudi Arabia: Jafurah Gas Project
US$110 billion
Saudi Aramco
State-owned Saudi Aramco is moving ahead with development of the massive Jafurah gas project, which it says will help meet growing energy demand and provide feedstock for hydrogen production.
First gas from the $110-billion project is expected in 2025, rising to reach two billion cubic feet per day by 2030. That’s about one-third the volume of all the natural gas produced in British Columbia. Saudi Aramco produced 10.6 billion cubic feet of natural gas per day in 2022, or more than half the gas produced in Canada.
Last year the company started construction work on the gas processing facility that is the anchor of the Jafurah project. Aramco is reportedly in talkswith potential partners to back the US$110 billion development.
Russia: Vostok Oil
US$170 billion
Rosneft
Russian state-owned oil company Rosneft continues to barrel ahead with the massive Vostok oil project in the country’s arctic, which Rosneft calls the largest investment in the world.
The US$170 billion project will use the Northern Sea Route to export about 600,000 barrels per day by 2024. Production is expected to increase to two million barrels per day after the second phase. For comparison, Canada’s entire oil sands industry produces about three million barrels per day.
The main problem the energy industry faces is global underinvestment in conventional sources, Rosneft CEO Igor Sechin said earlier this year. He stressed the importance of Vostok’s oil supply for growing Asian economies.
“Vostok Oil project will provide long-term, reliable, and guaranteed energy supplies,” Sechin said.
Two new icebreaker vessels recently helped deliver 4,600 tonnes of cargo including oil pipes for the project to the arctic development sites, the Barents Observer reported.
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.”
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
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