By MARI IWATA
TOKYO -- Canada has set its sights on energy-hungry Asian
markets, especially for natural gas, after taking a huge
financial hit as a result of the shale-gas boom in the
US, Canadian Minister of Natural Resources Joe Oliver said.
Canada is developing five major liquefied-natural-gas export
terminals on its Pacific Coast that, if all are completed,
would enable it to export up to 66 million tpy of LNG -
equivalent to about 80% of annual demand from Japan, the
world's largest LNG exporter, Mr. Oliver told The Wall
Street Journal during a visit to Tokyo.
For Canada, these LNG projects mean opportunities to
expand and diversify our export markets, he said.
The opportunity is huge.
Mr. Oliver arrived in Japan late Monday for a three-day
visit focused primarily on meeting Japan's need for LNG.
A decade-long boom in US production of natural gas drove
prices to a record low of $1.91 per million British thermal
units in April, and has created a greater degree of energy
independence for the US, which is virtually Canada's only
energy export market.
US imports of pipeline gas, most of which come from Canada,
slipped 1.7% over the past decade, while its total gas
consumption rose 5.6%, data from the US Energy Information
The shale-gas output boom is expected to continue, turning
North America into a net LNG exporter by 2017, the
International Energy Agency said this year.
Meanwhile, LNG prices in Asia are especially attractive for
global exporters, whether in Canada, the US or Australia. Spot
LNG in Asia this year has averaged $13-$18/mmbtu, compared with
$2-$3 mmbtu for US spot natural gas prices in the same
Similarly, light, sweet crude oil futures on the New York
Mercantile Exchange have been around $90-$100/bbl since early
August, while Asian benchmark Dubai crude oil averaged around
$108 in August, according to price-reporting agency Platts.
Meanwhile, energy demand is growing in Asia, and Japan is
especially hungry for LNG.
Japans LNG demand has risen sharply since the March
2011 Fukushima Daiichi nuclear accident as utilities have
boosted output from gas-fired power plants to make up for idled
nuclear capacity. Japan has idled all but two of its nuclear
Similarly, China's consumption of natural gas is expected to
more than double over the next five years, driving average
annual growth in global natural gas demand of 2.7% through
2017, International Energy Agency said.
The US [demand] is not growing at the same pace with
Asia, Mr. Oliver noted.
Five LNG projects are being developed on
Canada's Pacific Coast, including three at Kitimat, British
Columbia. One of the three involves a joint venture between
Shell, Korea Gas, Mitsubishi and PetroChina. It is expected to
come online as early as 2014.
The Canadian government also aims to complete authorization
of Enbridges controversial Northern Gateway oil pipeline
by the end of next year, Mr. Oliver said. The pipeline would
run from Alberta to a port in British Columbia, Canada's
westernmost province, to ship oil to China and other buyers in
Other LNG projects, including in the US and
Australia, are targeting Japanese demand, but Mr. Oliver
expressed confidence in Canada's prospects. It is
Japans interest to diversify energy sources, he
Mr. Oliver will attend an LNG conference in Tokyo Wednesday
and visit South Korea on Thursday and Friday.
Dow Jones Newswires