CALGARY, Alberta, July 15 (Reuters) - Canadian natural gas production will drop 10 percent to 13 billion cubic feet per day (bcf/day) by 2025 unless new terminals are built to enable global LNG exports, the Canadian Association of Petroleum Producers said on Wednesday.
There are 19 LNG terminals proposed for Canada’s Pacific coast aimed at exporting Canadian gas to energy-hungry markets in Asia, but progress has been slow as the projects seek provincial and federal regulatory approval.
So far only one consortium led by Malaysia’s state-owned energy company Petronas has given a conditional go-ahead to investing in the project.
In the meantime, cheap and plentiful U.S. gas supplies are displacing western Canadian gas in the traditional markets of central Canada, the U.S. Midwest and U.S. Northeast.
Without increased demand from the fast-growing global LNG market, CAPP expects Canadian production to decline steadily over the next decade and then remain flat at 13 Bcf/day until the end of the current forecast period in 2030.
If Canada can participate in the global LNG market, production should recover to current levels of 14.5 Bcf/day by 2020 and potentially climb to 17 Bcf/day by 2030.
“Accessing the global LNG market can strengthen the long-term viability of Canada’s natural gas industry and backstop the significant economic benefits it creates for Canadians,” said CAPP Chief Executive Tim McMillan.
He urged regulators to approve new terminals promptly in order for Canada to remain competitive and attract new investment to fund the multi billion-dollar mega-projects.
“Proposed LNG projects require timely political and regulatory decisions because global LNG competition is fierce and involves many well-established international suppliers. The window of opportunity for Canada’s LNG market will not stay open forever,” McMillan said.
CAPP estimates Canada has more than 100 years of natural gas supplies. (Editing by Alan Crosby)