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CALGARY \u2014 Hundreds of kilometres up the Pacific coast from where Canada\u2019s first liquefied natural gas export terminal is set to start up this summer, a monster lays dormant.<\/p>\n
Alaska has long had ambitions to ship its natural gas to international markets, but the cost and scale of such an undertaking has held it back for decades.<\/p>\n
But there\u2019s been renewed interest in the megaproject since U.S. President Donald Trump issued an executive order on his first day in office devoted to Alaska resource development. State officials, including Gov. Mike Dunleavy, have been busy in recent weeks trying to woo potential Asian buyers of the gas under long-term contracts.<\/p>\n
Industry experts have doubts the Alaska behemoth will awaken this time, but they say Canada must be mindful of the threat it could pose to its own nascent LNG industry.<\/p>\n
\u201cIf there\u2019s a time to build it, now would probably be your best bet,\u201d Enverus senior analyst Josephine Mills said of the Trump administration\u2019s keenness on Alaska gas and the Republicans\u2019 control of Congress.<\/p>\n
\u201cBut then again, this has been being talked about for the past 30, 40 years. It\u2019s by no means a new project. So definitely I think it would be faced with a lot of hurdles to come.\u201d<\/p>\n
With an estimated price tag of US$44 billion, Alaska LNG would see a 1,300-kilometre pipeline traverse the state from north to south, passing through treacherous terrain to deliver an average of 3.5 million mmBTU a day of gas to a liquefaction plant in Nikiski, south of Anchorage. The project also includes a carbon capture plant by the gas fields on Alaska\u2019s North Slope.<\/p>\n
Some of the gas would be for Alaskans\u2019 needs, but most would be loaded onto tankers and sold across the Pacific, the same markets Canadian LNG developers want to tap.<\/p>\n
\u201cIt would be beneficial to Canada to not have Alaska LNG be built,\u201d said Mills.<\/p>\n
But if it did go ahead \u2014 and that\u2019s a big if \u2014 it would be after 2030, she added.\u00a0<\/p>\n
Late last month, the state corporation behind the massive endeavour, Alaska Gasline Development Corp., signed Glenfarne Group as lead developer on the project. Glenfarne, a U.S. builder of energy infrastructure, now owns 75 per cent of the project, AGDC holding the rest.\u00a0<\/p>\n
A final investment decision on Alaska LNG is expected some time this year.\u00a0<\/p>\n
Kent Fellows, an economist with the University of Calgary\u2019s School of Public Policy, said contracts to buy LNG are signed before plants start up and usually span several years.<\/p>\n
So the trade chaos Trump has unleashed with a bevy of tariffs against one-time allies does the Alaska project no favours.<\/p>\n
\u201cIt can be really costly to make some of these investments if you\u2019re not sure that trade relationship is going to be stable going forward,\u201d Fellows said.<\/p>\n
\u201cOne of the huge advantages that the United States had up until about 12 months ago (is) they had a reputation for being a very stable economy, being an economy that believed in global free trade.\u201d<\/p>\n
If Alaska LNG is somehow successful in sewing up contracts with Asian buyers, it makes it harder for B.C. projects further behind in development to secure enough demand to justify their own plants.<\/p>\n
\u201cWith an LNG market, that competition happens at the time the facility is built, so timing the market can end up really, really important,\u201d said Fellows.<\/p>\n
However, the CEO of Canada\u2019s biggest natural gas producer said there should be plenty of interest to go around.<\/p>\n
Mike Rose, who heads up Tourmaline Oil Corp., foresees worldwide demand soaring by up to 50 million mmBTU by 2035.<\/p>\n
\u201cWe won\u2019t be oversupplying because there might be a project that comes on in Alaska,\u201d he said. \u201cWe need all of them.\u201d<\/p>\n
In a speech to Canadian Club Toronto last week, TC Energy chief executive Fran\u00e7ois Poirier said he\u2019d like to see a \u201cTeam Canada\u201d approach to developing LNG.<\/p>\n
TC Energy built the pipeline that ships gas across B.C. to the LNG Canada terminal in Kitimat.<\/p>\n
\u201cIn Alaska, the U.S. administration is today working toward signing (memorandums of understanding) for LNG with countries like Japan and South Korea,\u201d Poirier said.<\/p>\n
\u201cThe governor of Alaska has travelled himself to Asia to line up customers and investors for Alaskan LNG, and guess what? He returned from his trip with an agreement from Taiwan.\u201d<\/p>\n
Poirier said no matter which party wins the April 28 federal election, it will be key for the prime minister, premiers, businesses and Indigenous leaders to show a degree of alignment similar to the U.S..<\/p>\n
\u201cCollectively, we\u2019ll have to travel to Asia and market ourselves and underscore that Canada is back in business and is a good risk to take.\u201d<\/p>\n
\u00a92025 The Canadian Press<\/strong><\/p>\n<\/p><\/div>\n