Gazoduq : excitement for the liquid natural gas market

The liquefaction of natural gas, a process that allows the transportation of natural gas by reducing its volume by about 600 times, is becoming increasingly popular in Canada. On November 15, 2018, Gazoduq inc. officially announced the launch of its 4.5G $US project for the construction of a 750 km pipeline to connect TransCanada’s (TSX: TCP) network in northeastern Ontario to the future natural gas liquefaction plant of Energie Saguenay.

GNL Quebec inc. is a Quebec company that was created in 2014 as a result of the desire of two US investment firms, Breyer Capital and Freestone International LLC, to position themselves in the global market for liquid natural gas. To achieve this, the company put forward the Saguenay Energy project which aims to set up a natural gas liquefaction plant at the Maritime Terminal of Grande-Anse, 20 km east of Saguenay. The company would then have a strategic position allowing, among other things, access to hydroelectric power at competitive prices and a very interesting sea route for exports to Europe. In 2018, in order to take over the transportation of natural gas to Énergie Saguenay’s plant, GNL Quebec created Gazoduq inc., a subsidiary that would be responsible for the construction of a 750 km long pipeline allowing connection to TransCanada’s main natural gas network in northeastern Ontario; and then supplying the plant to Grande-Anse. The total cost of the project would be more than US$ 14 billion for the construction of the plant and pipeline.

Why embark on such a project? In 2017, in the global natural gas market, Canada positioned itself as the 4th largest producer (5%) and 5th largest exporter (7%) and its proven reserves could allow it to maintain current production levels for 300 years. According to the EIA (Energy Information Administration), natural gas is expected to play an increasingly important role in global energy demand, reaching 26% of the energy mix by 2040 (compared to 23% in 2018). In addition, many countries have announced plans to reduce natural gas production that opens the door to imports. Faced with the opportunity, no less than 24 liquid natural gas projects have emerged since 2011 in Canada. To date, the Canaport Regasification Terminal in Saint John, New Brunswick is the only operational site, but it is solely for imports.

On the financial side, the project seems very interesting, but after the recent failure of the Énergie-Est pipeline, it is clear that Quebec would be able to stop a project that does not meet the environmental requirements and/or respect the local communities concerned. Pipeline projects still pose a significant risk to the environment, and the recent explosion (October 9th, 2018) of an Enbridge (TSX: ENB) pipeline in British Columbia reminds us of this. In addition, in the current environmental context, it is crucial to consider whether such a project truly supports Canada and the world in meeting its GHG reduction goals. The hearings of the project at the BAPE will help us to see more clearly about it.

 

BIBLIOGRAPHY :

The globe and mail. (28 octobre 2018). U.S. investors back $7-billion LNG terminal for Quebec. [En ligne]. Disponible : https://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/us-investors-back-7-billion-lng-terminal-for-quebec/article21358071/

Gazoduq. (15 novembre 2018). Gazoduq : un nouveau projet de conduite de gaz naturel pour alimenter le complexe Énergie Saguenay. [En ligne]. Disponible : https://gazoduq.com/fr/media/gazoduq-un-nouveau-projet-de-conduite-de-gaz-naturel-pour-alimenter-le-complexe-energie-saguenay

Ressources naturelles Canada. (2018). Les projets canadiens de GNL. [En ligne]. Disponible : https://www.rncan.gc.ca/energie/gaz-naturel/5684

Énergie Saguenay. (2018). Documentation. [En ligne]. Disponible : http://energiesaguenay.com/fr/le-projet/documentation/

Ressources naturelles Canada. (2018).Faits sur le gaz naturel. [En ligne]. Disponible : https://www.rncan.gc.ca/energie/faits/gaz-naturel/20078#L9

Radio-Canada. (2 octobre2018). Un projet d’exploitation de gaz naturel liquéfié de 40 G$ obtient le feu vert en C.-B.. [En ligne]. Disponible : https://ici.radio-canada.ca/nouvelle/1127383/lng-canada-aval-investisseurs-gaz-naturel-liquefie

Le Devoir. (2018). Projet de gazoduc de 750 km en sol québécois. [En ligne]. Disponible : https://www.ledevoir.com/societe/environnement/541429/un-gazoduc-de-750-km-pour-exporter-du-gaz-naturel-a-partir-du-quebec

Global News. (2018). Enbridge ups pressure on repaired gas line after explosion near Prince George. [En ligne]. Disponible : https://globalnews.ca/news/4673618/pipeline-explosion-repair/

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