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LNG development in British Columbia
A rising tide floats all boats
Jamie Sawchuk, LNG practice leader on how a stakeholder engagement strategy mitigates investor risk and leads to a bright future for B.C. LNG development.
While Canada has been a major natural gas producer and exporter for decades, growing Asian demand means that we need to ramp up development of our LNG supply chain.
This challenge and related issues are described in Sea change? LNG on the horizon which is a call to survey global trends and realize the potential of LNG for all Canadians.
Our location and stable political landscape give us a tremendous advantage over other countries, but with natural gas potentially available from a resurgent U.S. and from Australia which is expected to overtake Qatar in world LNG export leadership within the decade, time is of the essence.
Development will be capital-intensive and LNG investors will not be able to rely on sky-high commodity prices to absorb cost overruns.
- Are foreign investors willing to trade the high initial costs of LNG infrastructure development for a reliable supply at acceptable long-term prices?
- Will Canada’s foreign investment rules for the oil sands also apply to the LNG sector?
And there are domestic political, economic and social issues to consider as well. For instance, Canada doesn’t have enough people with the right skills to build mega energy projects.
- An exploding workforce in British Columbia will create social pressures: how to manage?
- How do we productively engage all stakeholders including First Nations peoples?
Canada has a bit of an edge over the U.S., but the projects must come in on-time and on-budget. And in Deloitte’s estimation, the window to secure LNG contracts and get to market is about five years.
There is considerable risk but as long as stakeholders pursue an engagement strategy—working together to share this risk—all stakeholders will be able to share in the resulting prosperity for many generations to come.