Canadian natural gas producers form new LNG consortium

Ten Western Canadian producers have joined together to find a path to send Canadian liquefied natural gas to new markets.

Alan Boras, director of communications and stakeholder relations for Seven Generations Energy Ltd., said the group of producers, predominantly Montney producers, are coming together to see where they had common interest around new markets for their natural gas.

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Boras said the group — made of up Seven Generations Energy, Peyto Exploration and Development Ltd., Advantage Oil & Gas Ltd. and others — has been exploring various opportunities for supplying LNG projects that would export natural gas from Canada.

“There have been several proposals [that have] come forward in different configurations,” said Boras. “LNG Canada is going ahead. There are others that still have opportunities on the horizon. It’s a really a matter of trying to see where there could be a confluence of all the component pieces that are required to have a project come together.”

A committee, along with consultant Greg Kist, former president of Pacific NorthWest LNG, is collectively looking at the opportunities that exist, which may include a new or cancelled projects, said Boras.

Boras said this kind of initiative is what Canadian resource companies have done in the past. In the mid-1990s, producers, frustrated by restricted pipeline takeaway capacity, which forced the companies to compete with one another, teamed up to build the Alliance natural gas pipeline moving natural gas from Western Canada to the Chicago market hub.

“The thing about energy [projects] is they are very large projects that require a lot of capital investment and infrastructure,” said Boras. “If you think about an LNG project, you need to have reserves in sizable amounts. You need transportation to a port and you need a liquefaction plant. And you need tankers and you need buyers. All of those pieces are very large and it takes a lot of co-ordination to bring them together.”

Canada has a tremendous opportunity to supply large populations with cleaner burning natural gas. Natural gas use in the Asian market would be a benefit in many ways, said Boras.

“First of all, it would help us develop our resources,” he said. “It has the potential to close the gap on prices between the oversupplied Canadian market where prices are relatively low, and the world market. There is an opportunity to develop some of that value for Canada in the economic development in the jobs, in the taxes, in the royalties.”

There’s also the opportunity for Canada to help Asian countries end energy poverty and advance societies, said Boras.

“From the wellhead in Alberta to the potential burner tip in Asia there is value and benefit to be gained all along the way,” said Boras.          

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