The chief executive officer of Malaysia’s state-owned Petronas is to deliver the keynote address this week at a Vancouver conference that will shine a spotlight on British Columbia’s fledgling liquefied natural gas industry.
Shamsul Azhar Abbas, who is slated to talk about the global economics of exporting LNG, will be visiting Canada as 14 B.C. projects jockey to turn their proposals into reality.
Petronas leads the Pacific NorthWest LNG joint venture, considered the front-runner in the race to export B.C. natural gas in liquid form to energy-thirsty customers in Asia.
B.C. Premier Christy Clark will be on hand to welcome Mr. Shamsul on Wednesday, when the three-day conference kicks off. Notable energy executives spearheading B.C. projects will be attending, including Pacific NorthWest LNG president Greg Kist.
Industry experts caution there is room for only four B.C. LNG projects at most, given that the players in Canada are trailing foreign rivals in places such as Australia, the United States and Qatar.
“Canadian LNG production not only faces competition from other countries but from other energy resources. Coal and nuclear power production is on the rise in many countries,” according to a new report by Ernst & Young.
Still, demand for liquefied natural gas is forecast to be robust in the years ahead. Japan is the world’s largest importer of LNG, while demand in China is soaring.
“In time, China expects to feed significant demand with its own shale gas resources but until that resource is developed, it is likely that Chinese demand for LNG will grow,” EY said in its report.
British Columbia has advantages such as faster shipping times to Asia, compared with projects planned for the U.S. Gulf Coast, but challenges include matching skilled labour with massive construction, and waiting for details of the provincial government’s LNG tax program. “The LNG tax is expected to encounter additional complexities given the multiple different ways in which LNG will be produced and exported,” the EY report said.
As well, consultations with First Nations will have to be completed before LNG proponents make their final investment decisions. “This issue – gaining First Nations support – may be the most complex for energy companies to address,” according to the report. “Training and education programs, real and lasting job opportunities, support for social programs, community investment and finding a way to share the other economic benefits are all critical tasks.”