Scaling up LNG would have spillover benefits into oilsands, new report says

Summary

• A new S&P Global Energy study states that scaling up Canada's liquefied natural gas (LNG) exports would boost producer profits & create spillover benefits for the oilsands & petrochemical sectors.
• Canada aims to produce up to 100 megatonnes of LNG annually by 2040, which S&P projects would make the country the third-largest global supplier.
• Current projections place Canada on track to reach only 36 megatonnes per year by 2050 without significant changes.
• Closing the gap to the 2040 target requires drastically increased investment in infrastructure like pipelines & tripling drilling activity in Alberta & British Columbia gas fields.
• Daniel Yergin, S&P vice chairman, notes Canada's competitive strengths include vast resources & a strategic geographic location free of choke points.
• Increased drilling would raise natural gas liquids (NGLs) production, which serve as feedstocks for petrochemicals, fertilizers, fuels, & oilsands diluent.
• Kevin Birn, S&P's chief Canadian energy analyst, emphasizes that LNG growth is essential for maximizing oilsands value & overall economic potential.
• NGLs constitute about a quarter of physical output from typical Canadian gas wells but generate nearly half of the revenue.
• An accelerated development scenario could support 1.2 million barrels per day of oilsands supply at its 2040 peak & see overall NGL production nearly triple by 2050.
• The study estimates the expanded NGL sector could provide $300 million in value by 2050.