LNG coalition faces uncertain future after leader quits, proposals wane

The LNG Canada industrial energy project under construction in Kitimat, B.C., on Sept. 28.DARRYL DYCK/The Canadian Press

An industry group formed eight years ago to promote the promise of abundant Canadian exports of liquefied natural gas faces an uncertain future after its leader resigned and the number of LNG proposals shrank.

Bryan Cox has left the Canadian LNG Alliance after nearly four years as the group’s president and chief executive officer. He recently joined Calgary-based Petronas Energy Canada Ltd. as the company’s director of external affairs and policy.

When the alliance launched in 2014, it focused on touting more than 20 LNG proposals in British Columbia. But most proponents gradually dropped out in the subsequent years, saying that they were unable to make the economics work, and that regulatory delays were hurting them.

The alliance has four remaining members: LNG Canada, Woodfibre LNG, Enbridge Inc. ENB-T and FortisBC. FTS-T

Teresa Waddington, LNG Canada’s vice-president of corporate relations, said Mr. Cox advocated for LNG development in Canada while working collaboratively with First Nations. “We wish him success in his next role,” Ms. Waddington said in a statement, confirming his resignation from the Vancouver-based alliance.

David Keane served as the alliance’s president and CEO for the first four years. Mr. Keane, a former Woodfibre president who was previously based in Vancouver, is now senior vice-president of policy and corporate affairs at Houston-based NextDecade Corp., which is proposing the Rio Grande LNG project in Brownsville, Tex.

How the U.S. became a global leader in LNG – and why Canada has fallen behind

In the United States, the first LNG export terminal in the lower 48 states began operating in 2016. Another six sites have opened since then. With three new facilities in the Gulf Coast under construction, U.S. LNG export capacity is forecast to jump 40 per cent to more than 130 million tonnes annually within three years.

By contrast, the Shell PLC-led LNG Canada export terminal, currently under construction in Kitimat, B.C., is scheduled to become Canada’s first such facility when shipments to Asia begin in 2025. LNG Canada’s initial export capacity will be 14 million tonnes a year.

Malaysia’s state-owned Petronas, the parent of Petronas Energy Canada, owns 25 per cent of LNG Canada through a separate wholly owned unit, North Montney LNG Limited Partnership. Petronas Energy Canada is the upstream unit that oversees natural gas assets in the North Montney region of northeast B.C.

Mr. Cox’s departure has prompted LNG Canada to hold discussions with the First Nations LNG Alliance, an Indigenous group that formed in 2015.

Organizations such as the Sierra Club, Wilderness Committee and Office of the Wet’suwet’en oppose LNG, saying the fossil fuel is hampering the growth of renewable energy. But Karen Ogen-Toews, CEO of the First Nations LNG Alliance, said she is committed to promoting LNG as a better energy option than coal. She argues that LNG should be a key part of the hoped-for energy transition to economies with net-zero emissions of greenhouse gases.

Founded as the BC LNG Alliance, the industry group changed its name to the Canadian LNG Alliance in 2020 as it broadened its scope by also highlighting proposals outside B.C.DARRYL DYCK/The Canadian Press

“We have to make those shifts to renewables and hydrogen, but we don’t want to throw the baby out with the bathwater,” she said in an interview. “We fully understand and realize that we’re going through climate change.”

Ms. Ogen-Toews said preliminary talks between the First Nations LNG Alliance and LNG Canada are under way in a bid to gain financial support from the Shell-led consortium, and the Canadian LNG Alliance will likely be wound down.

She plans to hold talks with Woodfibre, Enbridge and FortisBC in January in hopes of persuading them to support the First Nations group, which has a board comprised of nine Indigenous directors. Among them are Eva Clayton, president of the Nisga’a Lisims government, and Haisla Nation chief councillor Crystal Smith.

Five proposals for exports using tankers remain active in B.C., including potential expansions at LNG Canada in Kitimat and FortisBC’s Tilbury LNG domestic plant in Delta.

The other three proposals are Cedar LNG, Ksi Lisims LNG and Woodfibre. Cedar is led by the Haisla together with co-owner Pembina Pipeline Corp., while Ksi Lisims is backed by the Nisga’a, Rockies LNG and Western LNG. The Squamish Nation supports Woodfibre, which is co-owned by Pacific Energy Corp. Ltd. and Enbridge.

“LNG Canada believes the First Nations LNG Alliance remains ideally positioned to advance and promote B.C.’s LNG industry,” Ms. Waddington said, adding that the Indigenous group “will lead policy advocacy in B.C. and promote awareness of the value and competitiveness of B.C. LNG.”

The war in Ukraine has heightened global interest in LNG, as European countries seek to wean themselves off Russian supplies of natural gas.

Clark Williams-Derry, a Seattle-based analyst with the Institute for Energy Economics and Financial Analysis, said it remains to be seen whether LNG Canada forges ahead with expansion plans.

To feed the LNG Canada export terminal, TC Energy Corp. is building the contentious Coastal GasLink pipeline, which is designed to transport natural gas to Kitimat from the North Montney region.

“Part of the reason for LNG Canada is to justify keeping those Montney reserves on the books,” Mr. Williams-Derry said. “The reserves are a nest egg for future production and cash flow.”

Founded as the BC LNG Alliance, the industry group changed its name to the Canadian LNG Alliance in 2020 as it broadened its scope by also highlighting proposals outside B.C.

But LNG export plans in Quebec, New Brunswick, Nova Scotia, and Newfoundland and Labrador have been either cancelled or remain stalled.

https://www.tausiinsider.com/lng-coalition-faces-uncertain-future-after-leader-quits-proposals-wane/?feed_id=323633&_unique_id=63aff2f00e7ef