LNG Exports Transformed the U.S. Energy Sector. Will It Ignite Success in Canada?

Canada's Liquefied Natural Gas (LNG) industry is at a threshold. LNG Canada represents the country's first large-scale LNG development, with the potential to significantly expand the export market for Canada's natural gas. Here are our key insights:

-- LNG Canada represents the country's first large-scale LNG development, with the potential to provide a material benefit to Canada's natural gas industry.
-- The strategic advantages for Canada include its proximity to key LNG export markets, low emission intensity operations, and higher LNG quality.
-- A notable impact of U.S. LNG development has been the linkage of domestic gas prices to the global markets.
-- Significant reliance on the U.S. has led to a wide NYMEX-AECO price differential. Canadian LNG has the potential to narrow the gap.

"The hurdles faced by Canadian LNG projects are in sharp contrast to the development of LNG over the same period south of the border where success of the U.S. LNG industry has fundamentally altered the North American natural gas ecosystem," said Karan Gupta, Karan Gupta, Assistant Vice President of Energy, Utilities, & Natural Resources at Morningstar DBRS.

He added: "With the completion of the LNG Canada export terminal in British Columbia in 2025, the export of LNG will provide a pathway to new international markets that were previously inaccessible by Canada because of lack of infrastructure and mitigate the impact of declining pipeline deliveries of natural gas to the United States., its primary market."