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Minister of Natural Resources Joe Oliver speaks during a press conference on Parliament Hill in Ottawa on Monday, May 7, 2012.Sean Kilpatrick/The Canadian Press

Natural Resources Minister Joe Oliver is offering assurances to Asian customers that Canada will move quickly to build liquefied natural gas plants capacity on the west coast to feed their growing demand.

Accompanied by several companies involved in proposed projects in British Columbia, Mr. Oliver spoke at an international LNG conference in Tokyo on Wednesday where he promoted Canada as a secure source of gas and a welcoming place for Asian investment.

Despite some skepticism in the industry, the federal minister noted that there are currently plans to build capacity to liquefy and export nine-billion cubic feet per day of gas, an amount equal to two-third of Canada's current production.

"The opportunity is huge, our competitive advantage is clear and we are poised to become a major new safe, reliable and cost-effective LNG supplier to Japan, Korea and other Asia-Pacific nations for years to come," Mr. Oliver said in a speech in Tokyo.

Accompanying Mr. Oliver were executives from several companies, including Apache Corp., Nexen Inc., Royal Dutch Shell PLC and Spectra Energy, which recently announced plans to build a 4.2-billion cubic feet per day pipeline to carry gas to the coast.

The minister met on Tuesday with Japan's Industry Minister Yukio Edano, and on Wednesday with his South Korean counterpart before heading to Seoul to continue to effort to woo customers and investors.

Mr. Edano called Wednesday for a better deal on prices, which are tied to oil and are considerably higher in Japan than in Europe, or especially North America.

Not everyone in the industry is as optimistic that all the proposed projects will be built.

The LNG projects are "terribly expensive," Real Cusson, senior vice-president for marketing at Canadian Natural Resources Ltd., told The Globe and Mail's Nathan VanderKlippe earlier this week.

Mr. Cusson estimated the five projects could cost $50-billion to $75-billion to construct, and suggested it would be more profitable to use the gas supply the power sector, which now relies heavily on coal in Alberta and Saskatchewan.

As well, there are concerns about a shortage of skilled workers needed to construct the LNG plants in the remote towns of northern British Columbia.

In a telephone interview from Tokyo, Mr. Oliver said the industry executives remain optimistic that they can proceed, especially given the hunger for a secure source of gas in markets like Japan and South Korea, and the higher price of gas in Asia than in North America.

"The private sector is going to determine the economics of it but they certainly are of the view that it is realistic," he said.

"There is certainly amongst everyone involved a belief that the economics do in fact work and, that for the Japanese and Koreans, Canada can represent a reliable supply of significant size."

Together, the two east Asian countries account for nearly half the world's imports of liquefied natural gas. Global demand is expected to soar, especially from China and India, as more supply comes onto the market.

Japan is particularly eager to find new sources of energy as it contemplates the dramatic reduction – and perhaps even closure – of its nuclear power fleet after the meltdown last year at Fukushima.

Mr. Oliver said it is important for Canadian project proponents to move as quickly as possible to head off competition from Australia and other suppliers. He said the government's recent effort to streamline environmental assessments will help in that regard.

The U.S. is currently delaying major plans to export natural gas, which has become cheap and abundant as a result of the shale gas boom in the past five years.

The Obama administration this week shelved until after the November election a report on whether the American domestic customers would be harmed by large-scale LNG exports. That report will be a key factor in Department of Energy considerations of export licenses sought by producers.

Mr. Oliver said Canadians should not worry that companies are planning to export a quantity of natural gas greater than is currently consumed by Ontario and Quebec.

"We have well over 100 years supply of gas," he said. "We don't have the constraint based on our internal needs that the Americans have."

Follow Shawn McCarthy on Twitter: @smccarthy55Opens in a new window

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