Canada's NEB Sees Positive Long Term LNG Prospects

The liquefied natural gas (LNG) industry will capture a growing segment of the global market because the demand for natural gas is expected to rise in years to come, the National Energy Board (NEB) said.

In an Energy Market Assessment (EMA) entitled Liquefied Natural Gas, a Canadian Perspective, the NEB provides an overview of the supply and demand of LNG, and its potential trade prospects. The report also includes an overview of the Canadian gas markets and energy infrastructure.

While many sectors of the global economy have shown signs of a recession, the recent downturn is not anticipated to bear too heavily on the demand for more natural gas in the long run. As a result, countries around the world are actively pursuing options to secure new sources of natural gas, and LNG is definitely in the running.

"LNG provides an option to diversify and enhance the reliability of natural gas supply, but ultimately it's the market conditions, stakeholder
involvement and contractual arrangements that will set the extent of LNG imports," said Gaetan Caron, NEB Chair and CEO. "In North America alone, the supply of LNG is projected to exceed five per cent (5 Bcf/d) of the total natural gas requirement by 2020."

Once considered the most likely source to offset the ongoing decline in the production of conventional natural gas, the expected increase in LNG imports has not materialized as anticipated in areas such as North America where shale gas and other unconventional natural gas resources have filled part of the gap.

The only Canadian facility currently equipped to import LNG is the Canaport terminal located in Saint John, New Brunswick. This regasification terminal, which is expected to become operational in early 2009, will serve markets in Atlantic Canada and the significant New England market where LNG has historically provided up to 25 per cent (184 Bcf) of the annual natural gas requirement.

The NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest, within the mandate set by Parliament in the regulation of pipelines, energy development and trade. As part of its mandate the NEB monitors the supply of all energy commodities in Canada and publishes reports on energy, called Energy Market Assessments.