TC Energy chief executive François Poirier says geopolitical events have presented Canada with a 'generational opportunity.'Todd Korol/The Globe and Mail
The Middle East conflict and U.S. trade tensions have amplified the need for Canada to ramp up exports of liquefied natural gas to Asia, the chief executive officer of TC Energy Corp. TRP-T says.
The United States far outpaces Canada in the race to supply LNG globally, CEO François Poirier said in a speech to the Canadian Club of Ottawa that was webcast on Tuesday.
“Geopolitical events have presented Canada with a generational opportunity,” he said. “But to seize it, Canada must improve competitiveness and attract global capital to build big things again.”
Before the U.S. and Israel launched attacks on Iran on Feb. 28, about one-fifth of the world’s oil and LNG supplies passed through the Strait of Hormuz.
Qatar, the world’s second-largest LNG exporter after the U.S. last year, halted its production after Iran attacked Qatari facilities and the strait virtually closed to marine traffic.
“With safe shores and proximity to markets, Canada can offer a reliable alternative,” Mr. Poirier said, adding that LNG exports to Asia “can strengthen energy security for our allies while delivering significant economic benefits for Canada.”
Why the Strait of Hormuz has been a global commerce chokepoint for centuries
LNG Canada, this country’s first export terminal for natural gas in liquid form, began shipping from Kitimat, B.C., to Asia last June. Two smaller projects in British Columbia – Woodfibre LNG near Squamish and Cedar LNG in Kitimat – are under construction.
The contentious Coastal GasLink pipeline, operated by TC, is supplying natural gas from northeastern B.C. to LNG Canada and will be used for Cedar.
Climate activists say Canada needs to focus on renewable energy, not on fossil fuels such as LNG. They also warn about methane leaks from the production of natural gas through fracking in northeastern B.C.
Groups urging the federal government to put the brakes on LNG development include the Wet’suwet’en Nation, Skeena Watershed Conservation Coalition, Dogwood, David Suzuki Foundation and Canadian Association of Physicians for the Environment.
Canada is the world’s fifth-largest producer of natural gas. LNG Canada’s shipments last year put this country in 19th place out of 24 LNG-exporting nations.
Calgary-based infrastructure company TC derived 43 per cent of its $15.2-billion in revenue last year from Canada, 47 per cent from the U.S. and 10 per cent from Mexico. Among LNG-exporting countries last year, Mexico ranked 22nd.
“The U.S. continues to lead in the race to meet global LNG demand – a race Canada should be winning with its proximity to Asia and abundant low-cost natural gas supply,” Mr. Poirier said.
Opinion: In the Iran oil shock, energy superpower Canada must seize the day
Prime Minister Mark Carney announced in September that LNG Canada’s Phase 2 expansion plan made the list of major projects of national interest to be considered for fast-tracking.
In November, Mr. Carney said Ottawa has added Nisga’a Nation-backed Ksi Lisims LNG in northwestern B.C. to the growing roster of plans submitted to the Major Projects Office, which is seeking to expedite a wide range of developments in sectors such as energy, mining and infrastructure across Canada.
“It is very encouraging that the federal government has acknowledged the problem and created the Major Projects Office to cut through and clear up permitting timelines,” Mr. Poirier said.
The lack of LNG supplies from Qatar has sent shocks across the global industry, with benchmark spot prices for LNG in March jumping more than 60 per cent in Europe and surging 90 per cent in Asia-Pacific markets.
Eight U.S. LNG export terminals have opened since 2016, and another four are slated to be operating by 2028, including the first exports from Golden Pass LNG in Texas anticipated this spring.
In 2013, there were more than 20 LNG proposals in B.C., but most of those plans fizzled. Among the projects still active is Cedar, located on the traditional territory of the Haisla Nation, with construction expected to be completed in late 2028.
The Haisla own 50.1 per cent of Cedar, while Calgary-based Pembina Pipeline Corp. holds 49.9 per cent.
During trade tensions with the U.S., Canada must aggressively strive to diversify its economic trading partners, Mr. Poirier said.
“Businesses and Indigenous leaders need to collaborate much, much sooner in the development cycle to build alignment and shared economic prosperity and move at the pace dictated by global customers,” he said.
“Generational success will depend on our ability to execute, not by our ability to follow process. It is time to own the economic podium.”