Canada and the U.S. are competing for huge gas projects that would involve investment in much-needed infrastructure to help export the energy resource.
Giant energy companies are proposing a half trillion dollars in projects to export newfound North American natural gas from either Western Canada or the U.S. Gulf Coast, the Wall Street Journal reported Monday.
Producers of natural gas are scrambling to profit from the gas boom in Canada and the U.S. by sending the cheap gas to Asia, where demand and prices are high. While some are looking toward Canada for its industry-friendly attitude and closeness to Asian markets, others are betting on the developed infrastructure in the U.S., which they think will outweigh any political uncertainty over large-scale exports of liquefied natural gas, or LNG.
For natural gas to be exported, it has to first be converted into a liquid state by going through liquefaction terminals and then loaded onto tankers.
Many U.S. import terminals today are being converted into export facilities. Eurasia Group, a research consulting firm, estimated that energy companies could spend $50 billion converting existing LNG import plants in the U.S. to export facilities while they may spend $60 billion to build new export facilities in Canada.
Currently, there are 20 applications to build and operate LNG export terminals under review by the DOE. There have been delays, however, and that could make it difficult for the U.S. to compete with other countries that are already in the process of building export facilities, the report states.
In the past two years, only two projects have been approved, the most recent being OK'd in May.