Liquefied natural gas production in North America will double between 2024 and 2028, if all new LNG projects planned in the U.S., Mexico and B.C. go ahead, Evaluate Energy forecasts.
The energy business intelligence group notes in a new report that, of 10 LNG projects in North America now under construction, three are in B.C., two in Mexico and five in the U.S.
Another 18 are in the pre-FID (final investment decision), with sanctioning decisions expected in 2025. Four of those are in B.C.
That bodes well for natural gas producers in Canada and the U.S.
“These new projects will create a significant demand pull for natural gas,” the Evaluate Energy report predicts.
If the 10 projects currently under construction all go ahead as planned, it would more than double North American LNG production capacity by 2028, the report says.
“While all new projects have secured off-take deals, this does not guarantee that the export terminals will operate at full capacity," the report notes.
The three projects now under construction in B.C. are LNG Canada (Phase 1), Cedar LNG in Kitimat and Woodfibre LNG in Squamish.
Combined, they would produce 2.5 billion bcf/d of liquefied natural gas. The five U.S. LNG projects would produce 8.3 bcf/d, and the Mexican projects would produce 0.6 bcf/d, with the feedstock natural gas coming from the U.S.
So of the North American LNG projects under construction, B.C. would account for about 22 per cent of North American production growth.
Of the 18 North American projects in pre-FID, four are in B.C. Two are large projects that would, combined, produce 3.4 bcf/d -- LNG Canada Phase 2 in Kitimat and Ksi Lisims LNG north of Prince Rupert.
Two smaller LNG projects in pre-FID are the FortisBC Tilbury Island expansion and the JX LNG Canada Ltd. Summit Lake project in Prince George. That project would ship LNG via ISO containers through Prince Rupert.
There was some question whether the five projects in the U.S. in pre-FID would go ahead, after the Biden administration pushed the pause button all new LNG approvals. The new incoming president, Donald Trump, is fully expected to hit both the start and fast-forward buttons on LNG projects and exports.
The U.S. LNG projects will be competing for market share in Asia from Qatar, which is expected to double its LNG production and export capacity by 2030, from 10.3 bcf/d to 19 bcf/d, the Evaluate Energy report states.
“Qatari export growth between 2026 and 2030 could limit U.S. LNG export arbitrages by undermining prices — raising concerns of a mid-term supply crunch for U.S. exporters,” the report states.
“Another risk for U.S. LNG projects is new tariffs imposed by the incoming Trump administration especially for the LNG projects with signed sales and purchase agreements with Chinese importers,” the report observes.
“A 25 per cent steel tariff implemented in 2018 led to significant price increases for LNG projects. President-elect Donald Trump has stated that one of his first executive orders after taking power would be to put tariffs on all goods entering the U.S. from Mexico and Canada.
"Trump also threatened China with additional tariffs, raising concerns of another trade war between the two countries. In 2019, LNG exports from the U.S. to China came to a halt because of the tariffs.”
As for whether all this new North American LNG production and exporting will saturate the global market, the Evaluate Energy report points to a recent International Energy Agency report that forecasts global gas demand to reach an all-time high of 405 bcf/d in 2025 and 415 bcf/d in 2026.
“The Asia Pacific region is expected to account for almost 45 per cent of incremental global gas demand,” the IEA states in its Global Gas Security Review.
