Ottawa is open to plans by two companies to export liquefied natural gas from the East Coast to Europe to help address energy security issues stemming from the war in Ukraine, provided the projects are consistent with the climate goals of the Canada.

Global and regional energy issues are now linked to the Russian invasion, and the supply situation is undergoing a fundamental change as European countries prepare to sever their ties with Russian oil and gas.

Natural Resources Minister Jonathan Wilkinson said the federal government believes LNG projects being considered for the East Coast could be part of the energy transition to a cleaner economy. “They should be minimizing national emissions so it’s consistent with our climate plan,” he said at a news conference on Friday.

Wilkinson made the comments after he and Environment Minister Steven Guilbeault finished meeting with their counterparts at a Group of Seven meeting in Berlin. Canada and its allies have been emphasizing energy security since Russia’s invasion of Ukraine in February, as Europe strives to reduce its dependence on Russian energy.

Regulatory, geographic and logistical hurdles could still threaten the viability of East Coast LNG projects.

Mr. Wilkinson mentioned two proposals as being best placed to export LNG to Europe: Saint John LNG from Repsol SA in New Brunswick and Goldboro LNG from Pieridae Energy Ltd. in Nova Scotia. These two projects could start shipping the fuel to Europe within five years.

“We are obviously listening to the proponents who have proposed these projects, one of which is the project proposed by Repsol in New Brunswick,” he said. “Because this is an LNG import facility at this point, a lot of the existing infrastructure that you would need is already there.”

Ottawa in talks with Repsol and Pieridae Energy to fast-track proposed East Coast LNG export terminals

Yet the Canadian government’s commitment to fighting climate change means that any East Coast LNG proposal will have to incorporate electric drive technology to supercool natural gas in liquid form. Traditionally, companies have used natural gas-powered turbines in the liquefaction process. East Coast LNG proposals are also expected to eventually transition to hydrogen production as the world moves away from fossil fuels.

Another challenge is the lack of infrastructure in Canada for future East Coast terminals. Upgrades and expansions would be required on TC Energy Corp’s pipeline system. across Ontario and Quebec, to connect to a winding route that leads to the Maritimes & Northeast Pipeline from New England to New Brunswick and Nova Scotia.

Mr. Wilkinson pointed out that Énergie Saguenay’s proposal for GNL Québec inc. has already been rejected by the Quebec and federal governments. The proposals in Quebec, New Brunswick and Nova Scotia rely on transporting natural gas long distances from Western Canada.

He cited LNG Newfoundland and Labrador Ltd. as a possibility, although he noted that this is a longer-term prospect. LNG Newfoundland and Labrador is investigating the feasibility of securing offshore natural gas from the Grand Banks, with the goal of commencing LNG exports to Europe in 2030.

The Canadian Association of Petroleum Producers welcomed Ottawa’s general support for potential LNG exports.

“Canadian LNG can provide our allies with a safe, secure and responsibly developed source of energy for decades to come while helping to reduce global emissions by offsetting the world’s reliance on coal,” said the President. CAPP’s Lisa Baiton in a statement. “CAPP believes there is vast untapped potential to build an LNG industry on the country’s west and east coasts.”

LNG Canada’s $18 billion terminal is being built in Kitimat, northern British Columbia, targeting customers in Asia. The joint venture led by Shell PLC is the only LNG export project under construction in Canada. Scheduled to open in 2025, it would become the first LNG export terminal in Canada to ship the fuel overseas.

Russia supplied almost 40% of the European Union’s total natural gas consumption last year, according to the International Energy Agency.

Timothy Egan, president of the Canadian Gas Association, said recent energy talks should also prompt a review of Canada’s transition plans, including issues such as security of supply and affordability. .

“The security issue was pretty dormant until this year, until Russia invaded Ukraine, and suddenly it’s a priority,” he said in an interview. Friday.

The association represents a range of industry members, from distribution and transmission companies to equipment manufacturers and others in the natural gas sector.

Mr Egan has already met half a dozen ambassadors from EU member states rushing to cut energy ties with Russia, and has more meetings in the coming weeks.

“This is a seismic shift in the supply picture, and it’s a dramatic shift in a very short time,” he said.

Egan wrote three letters to Prime Minister Justin Trudeau this spring, the most recent on Friday, hoping to spark a national conversation about Canada’s LNG export opportunities.

Although he said there have been developments since Ottawa – including the creation of a Canada-EU working group on the green transition and LNG – he said more positive signals are essential to reinforce investor confidence in the types of projects Canada needs to increase its exports. .

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