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Lelu Island, site of an LNG export terminal proposed by Pacific NorthWest LNG.Brent Jang/The Globe and Mail

The natural gas industry is counting on energy exports to Asia to lift Canadian producers out of a slump.

Exports of liquefied natural gas to energy-thirsty customers in Asia are crucial because the United States has been sharply reducing its reliance on Canada for gas supplies, the Canadian Association of Petroleum Producers said Wednesday.

The amount of natural gas that Canada exports to the United States has fallen almost 30 per cent since 2007. "No recovery is anticipated due to the emergence of large volumes of U.S. natural gas production from unconventional supply sources," the association said in its 50-page report. "To realize its full resource potential, Canadian producers will require access to new markets such as those that can be reached through the export of LNG."

There are 19 B.C. LNG proposals in a range of preliminary to advanced stages, though no liquefaction terminals are under construction yet. Industry experts say there is room for only a handful of terminals due to fierce global competition for exports to Asia. Even assuming a relatively modest launch of LNG exports, Canadian natural gas production would climb to 17 billion cubic feet a day by 2030 from the current 14.5 billion, the association said.

By contrast, if LNG isn't exported, Canadian natural gas output is predicted to decline 10 per cent over the next decade and then flatten out to 13 billion cubic feet a day for the remainder of the forecast period from 2025 until 2030, the industry group cautioned. Natural gas exports to the United States accounted for 52 per cent of total Western Canadian gas production last year, with the rest consumed within Canada.

"The ability to access new markets via LNG exports has a significant impact on the production outlook," the group said.

Association president Tim McMillan said an array of LNG proposals requires timely political and regulatory decisions.

Industry analysts say the two front-runners are the Pacific NorthWest LNG project near Prince Rupert and the LNG Canada venture in Kitimat. The Pacific NorthWest LNG consortium, led by Malaysia's state-owned Petronas, is awaiting ratification in the B.C. Legislature of the group's project development agreement with the B.C. government. The project also requires clearance from the Canadian Environmental Assessment Agency.

The Royal Dutch Shell PLC-led LNG Canada joint venture received environmental assessment approvals last month provincially and federally. Project officials are continuing their consultations with First Nations.

LNG Canada external affairs director Susannah Pierce said expanding market access is an important issue for the Canadian economy. "Given that the United States is generally more self-sufficient in natural gas than they have ever been, export opportunities and new markets are fundamental to growth in gas production in Canada," Ms. Pierce said in an interview. "Getting the gas to new markets is an incredible value proposition for companies."

The Canadian Energy Research Institute issued a 72-page report Wednesday on Canada's role in the global LNG market. The institute said Pacific NorthWest LNG and LNG Canada have the best chances among major B.C. projects, and Kitimat LNG also looks promising. Kitimat LNG is a joint venture backed by San Ramon, Calif.-based Chevron Corp. and Woodside Petroleum Ltd. of Australia.

Of the smaller proposals, the report cited the Douglas Channel project in Kitimat and the Woodfibre venture near Squamish as cost-competitive possibilities. There are more LNG facilities on the drawing board in Canada than in any other jurisdiction, the institute said. "Much of this has to do with Canada holding abundant volumes of natural gas proved reserves," the study said. "Pacific NorthWest LNG is almost certain to go ahead. Will it be the first and last B.C. LNG project or the first of many? Either way, Canada is poised to finally join the game."

LNG Canada's proposed export terminal in Kitimat is slated to be on the site of a former methanol plant, while the planned dock for LNG tankers is a wharf that once belonged to a pulp and paper mill. Pacific NorthWest LNG wants to build its terminal on Lelu Island, which has forested areas spread over bog deposits.