Japan’s ambassador to Canada is warning Ottawa that further delays to the approval of liquefied natural gas projects like Petronas’ $36 billion Pacific NorthWest LNG risk missing a fast-closing window on the biggest LNG market in the world: Japan.
In a letter to the Canadian Environmental Assessment Agency (CEAA), Kenjiro Monji
warns that time is running out for Canadian projects that hope to supply Japan with LNG.
The PNW LNG project in particular has run into numerous delays, and is now past the 750-day mark in an environmental review process that was supposed to take one year.
A final recommendation was expected this month, but federal Environment Minister Catherine McKenna announced earlier this week that it will be delayed yet another three months.
The decision was pushed back to try to address ongoing concerns about the impact to the marine habitat in the Prince Rupert area.
Japan’s target is to have LNG provide 27% of the country’s energy mix by 2030 and the country is trying to secure new long-term contracts.
“Canada is one of the most promising potential LNG supply sources, with major reserves of natural gas,” Monji writes. But he adds that Canada has competitors.
“The global LNG market has changed drastically from a seller’s market to a buyers’, and competition among LNG suppliers is increasing. As LNG exports are usually based on long-term contracts, should Canada miss a window in demand for LNG, the next opportunity may be 10 or 20 years in the future.
“If the approval of the environment assessment is delayed further, Canada may run the risk of missing the chance to export LNG to the growing Asian market for a long time.
“We hope that the new Government of Canada will understand the economics of the world LNG market, and approve the environmental assessment of the Pacific NorthWest LNG project, which will become a source of Canadian LNG exports as early as possible.”