Canadian liquefied natural gas projects looking to fill gaps in the global market left by the absence of Russian gas may run into more challenging conditions than expected, industry experts have told a global conference in Vancouver.
They said the consensus among economists is that the gas shortage in Europe caused by the war in Ukraine is unlikely to last beyond 10 years, while the rise of renewables will cut into demand from 2030 onward.
Peter Abdo, chief commercial officer for LNG for German energy giant Uniper, told the LNG 2023 conference his company is committed to entering into 10-year contracts with potential suppliers 91裸聊视频� but longer-term deals will be more challenging because of Europe91裸聊视频檚 uncertain long-term demand for natural gas.
91裸聊视频淚 guess the caveat is, if any European player is entering into a long-term contract irrespective of the portfolio benefits, let91裸聊视频檚 just make sure that we have enough flexibility in that deal to where we can take it to Asia or some other market, in case we91裸聊视频檙e faced with a situation like stranded gas,91裸聊视频� Abdo said.
Octavio Simoes, president and CEO of U.S.-based natural gas firm Tellurian, agreed that the biggest opportunity opened by the European gas shortage is in Asia, a region with a much brighter long-term outlook in LNG demand.
However, Simoes said challenges remain on that front.
He told the conference that the current European gas shortage revealed a fundamental challenge for anyone wanting to sell LNG to Asia, as planned by projects in British Columbia 91裸聊视频� price may be the ultimate determining factor, not environmental standards touted by the West.
Simoes said European countries such as Germany jumped into the LNG market in the last two years to replace Russian gas, paying more for the commodity and essentially 91裸聊视频渢aking it from the rest of the world91裸聊视频� while driving up prices.
He said high prices pushed Pakistan to abandon plans to buy natural gas and instead quadruple commitments to coal, and similar trends are happening in Indonesia, Thailand, Vietnam and the Philippines.
91裸聊视频淚 look at it from the principle that we have roughly half the (global) population 91裸聊视频� 4 billion people 91裸聊视频� living on less than $7 a day,91裸聊视频� Simoes said. 91裸聊视频淪o whatever we do to decarbonize, if it91裸聊视频檚 not affordable, it91裸聊视频檚 not going to happen.91裸聊视频�
Earlier in the conference, LNG Canada CEO Jason Klein had said Canada would be competitive on the global market, partially due to its high environmental and social standards.
Klein said the $40-billion LNG Canada export facility in Kitimat, B.C. 91裸聊视频� the only one of its kind to reach the construction stage on the Canadian West Coast 91裸聊视频� is about 85 per cent complete and is scheduled to begin exports by 91裸聊视频渕id-decade.91裸聊视频�
In a written statement, the $40-billion joint-venture LNG project91裸聊视频檚 management said it does not comment on pricing and market conditions, but reiterated the facility will produce an affordable supply through 91裸聊视频渉ighly efficient equipment91裸聊视频� and 91裸聊视频渁ccess to an abundant supply of low-cost91裸聊视频� Canadian natural gas.
The CEO of multinational energy giant Petronas, which is backing LNG Canada, said Tuesday that he agrees pricing will play a big role as Asian countries decide whether to import LNG, switch to renewables or stay with coal.
But Muhammad Taufik told the conference that each market has unique dynamics, and Canadian LNG91裸聊视频檚 emphasis on environmental and social standards has a market in many Asian countries.
That demand will grow, he said, as governments around the world develop more concrete carbon-pricing policies, which would add more incentive for countries to buy lower-polluting fuels like LNG.
91裸聊视频淭hey will want this high-quality LNG,91裸聊视频� he told the conference. 91裸聊视频淚 can tell you already that my marketing and trading team are already delivering 91裸聊视频� or have already delivered 91裸聊视频� carbon-neutral LNG, and there have been customers who are specifically asking for carbon-abated cargoes.91裸聊视频�
One such market would be China, said PetroChina International91裸聊视频檚 senior vice-president Keith Martin.
Martin said Chinese President Xi Jinping91裸聊视频檚 announcement at the United Nations two years ago that China would achieve carbon neutrality before 2060 has set the world91裸聊视频檚 second-largest economy strictly down the path of buying lower-emitting fuels such as LNG.
91裸聊视频淲hen President Xi made that speech at the UN, that wasn91裸聊视频檛 just a speech,91裸聊视频� Martin said. 91裸聊视频淭hat was an order.91裸聊视频�
Muhammad Taufik said that comparing LNG91裸聊视频檚 costs and benefits as a whole, versus coal and renewables, may play to its advantage in Asia.
The key for LNG Canada and other Canadian projects, he said, is timing, making it imperative that production does not get delayed, thereby missing the window.
91裸聊视频淎 call-out to our Canadian friends: You do have probably one of the most unique opportunities to be part of the global solution,91裸聊视频� he said. 91裸聊视频淵ou are just naturally positioned to cater to these markets, and I think it would be a huge opportunity lost if we do not pivot to actually respond to those needs.91裸聊视频�
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