LNG investment team will work with industry to identify natural gas export opportunities for Alberta producers
Alberta natural gas producers are facing declining traditional markets thanks to stiff competition from US shale producers that has driven down prices to historic lows. The Alberta government has created an LNG investment team to increase final investment decisions on export projects, hoping to tap into rapidly growing markets outside North America.
“Whether we’re talking about oil or natural gas, the details are different but the story is the same. Albertans are getting pennies on the dollar because we can’t get our resources to international markets, and our biggest customer has become our biggest competitor, ” Energy Minister Margaret McCuaig-Boyd said in a press release.
“We can’t sit on the fence like previous governments did. We must take the bull by the horns and fight for the full value of our natural gas.”
The appointment of the investment team follows the release of a report from the government’s Natural Gas Advisory Panel, Roadmap to Recovery: Reviving Alberta’s Natural Gas Industry.
The panel was appointed in May, 2018 to provide advice to the Minister of Energy on short and medium-term actions Alberta can take to address persistently undervalued natural gas and extreme price volatility due to transmission, storage and market access challenges.
The LNG Investment Team is part of a broader made-in-Alberta oil and gas strategy that includes the aggressive expansion of energy upgrading opportunities within the province as the government takes short-term action to address the oil price differential crisis.
Members of the team will be meeting one-on-one with industry leaders to understand their needs and advise government on steps to advance final investment decisions on LNG projects. They will report back to McCuaig-Boyd in early 2019.
The advisory panel’s report outlines 48 technical and specific recommendations to grow the natural gas sector, including ways to improve pipeline capacity, regulatory standards and metrics, time frames for project approvals, transparency and accountability, and setting a vision for Canada’s natural gas industry.
Government has accepted the report and will continue to consult with industry on priorities going forward, according to the release.
The energy minister thanked industry veterans Hal Kvisle, Brenda Kenny, and Terrance Kutryk for their work on the advisory panel.
“It’s clear that Canada has taken a back seat when it comes to LNG development as our neighbours to the south move ahead at full speed. While the U.S. has more than 20 projects under review or already operating, Canada only has one moving forward,” said McCuaig-Boyd.
“We cannot afford to be left behind in this investment window – the time to act is now. The experience and knowledge of the investment team we have created will help us secure long-term LNG investments that will create lasting jobs and value for Albertans.”
John Carruthers is an executive fellow of the University of Calgary School of Public Policy and former VP of the Canadian Association of Petroleum Producers Greg Stringham comprise the LNG investment team.