The nascent liquefied natural gas (LNG) industry in British Columbia (BC) on Canada’s west coast presents a compelling opportunity to connect Canada’s massive gas resources to energy hungry Asian markets, including India. As Asian demand for this clean-burning fuel grows, Canada is racing to develop the critical infrastructure necessary to liquefy and transport its considerable gas resources to Asian markets.
Canada ranks fifth in the world in terms of estimated shale gas reserves, and the rapid commercialization of hydraulic fracturing technologies has rendered these reserves more accessible. Canada’s National Energy Board (NEB) now estimates that just one of BC’s main shale gas resource plays, the Montney formation, contains 449 trillion cubic feet of marketable gas, making it one of the largest natural gas basins in the world. This abundance of resources coupled with low domestic pricing has led international oil and gas players to attempt to exploit the opportunity to export gas.
In June 2013, the BC government set a target of achieving at least three commercially operational LNG facilities by 2020. BC currently has 12 proposals for LNG projects at various stages of development, seven of which have received export licences from the NEB. On 16 December, the NEB granted 25-year export licences to four LNG projects, proposed by BG Group, ExxonMobil, Petronas and Woodfibre LNG. Four other applications for long-term LNG export licences are pending.
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Vivek Warrier is a partner at Bennett Jones LLP, a law firm with offices in Calgary, Toronto, Edmonton, Ottawa, Dubai and Doha, and representative offices in Washington DC and Beijing.
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