Increasing global LNG supplies has become of paramount importance given Europe’s decision to move away from pipelined imports of Russian natural gas. As such, any and all LNG export projects — from the expansion of existing sites to proposals for greenfield terminals — are getting a fresh look. As always, though, only the projects that make the most economic sense are likely to advance to a final investment decision (FID), construction and operation. Which raises the question, where do things stand with the handful of LNG export terminals proposed for Eastern Canada, which offers the shortest, most direct access to Europe? In today’s RBN blog, we conclude our series on Canada’s LNG export potential by assessing several greenfield export sites on its East Coast.
With Europe’s winter heating season now thankfully over, the immediate need for large quantities of natural gas has lessened, but the urgency to move away from imported Russian gas has not. The elevation of gas-supply security to the top of the continent’s agenda as a result of the war in Ukraine has set many European nations on a course to increase LNG imports whenever and wherever might be possible. The catch, of course, is that with Russia supplying as much as 40% of the continent’s gas needs, very large quantities of additional LNG are going to be required, now and in the future. That means maximizing, as much as possible, the utilization of existing LNG import terminals, expanding them, and building new ones.
This step change in LNG demand — possibly as much as 15 Bcf/d equivalent if Europe were to wean itself completely off Russian gas — has meant that global LNG suppliers are feeling the pressure to provide more of the supercooled gas from existing terminals and quickly consider possibilities for expansion and the construction of new facilities. The U.S. is already well on its way in this direction with new liquefaction capacity awaiting the green light for construction, especially for terminals along the Gulf Coast. However, even if that new capacity were available in short order, it would still fall well short of the additional LNG that will be needed in Europe (and the rest of the world), even after considering capacity expansions from suppliers outside of North America.
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