Canada’s LNG imports dropped 88% since 2011 – NEB

Historically, most of Canada’s imported LNG came from Caribbean and Middle East

Canada’s only liquefied natural gas (LNG) import facility – the Canaport LNG terminal in New Brunswick – was completed in 2009 to supply natural gas to eastern markets and the Maritimes, according to a National Energy Board Market Snapshot.

However, due to changing market conditions, the number of LNG cargoes imported to the Canaport terminal has decreased by 88 per cent since its peak in 2011. A cargo imported to Canaport is typically equivalent to 80 million cubic metres of (non-liquefied) natural gas.

At its peak, Canaport imported over 3 billion cubic metres (9 million cubic metres per day or 324 million cubic feet (MMcf) a day) of LNG in gas equivalent volumes, which is only a third of its send out capacity.

In 2017, Canaport received just over 400 million cubic metres (an average of 1.1 million cubic metres or 39 MMcf a day). This is just four per cent of the facility’s maximum send-out capacity of 28 million cubic metres (1 billion cubic feet) per day.

North America’s natural gas market dynamics have changed.

A decade ago, the combination of hydraulic fracturing and horizontal drilling technologies made shale gas accessible when it had been previously uneconomic to produce. This increased natural gas production across North America.

With this, the need for LNG decreased and many LNG import facilities across the continent became under-utilized; some even decommissioned. Increased natural gas production in the United Sates (U.S.) Northeast, and improved pipeline access to the region have reduced the need for LNG imports at Canaport, even with declining Maritimes natural gas production. Natural gas imports are piped into New Brunswick and Nova Scotia by the Maritimes & Northeast Pipeline (M&NP).

Imports can be accessed by pipeline interconnections originating in Ontario and moving through the U.S. Since 2012, some bi-directional modifications of export pipelines allowed more U.S. sourced natural gas into Ontario. The recent approval for construction of the U.S. Atlantic Bridge pipeline project would expand the quantities of natural gas into New England and Nova Scotia via M&NP.

Despite more access to natural gas from the U.S. via pipeline, Canaport’s LNG imports are still used in the Maritimes and U.S. Northeast to meet demand, particularly during winter. The 10 billion cubic feet of natural gas storage at Canaport ensures large send out is available on short notice.

 Historically, most of Canada’s imported LNG has come from major producing countries in the Caribbean and Middle East. 55 per cent of LNG imported by marine vessel comes from the Caribbean, followed by 41 per cent from the Middle East, and small amounts from Europe, Africa, and South America.

Countries that have exported LNG to Canada include Egypt, Equatorial Guinea, Norway, Peru, Qatar (historically the world’s largest LNG producer), Spain, and Trinidad and Tobago (also a major producer, and relatively close to Canada).