A new study says developing a 30 million tonnes per annum LNG industry in British Columbia would grow Canada’s economy by an average of CAD$7.4 billion per year over the next 30 years.
This was revealed in a report by Conference Board of Canada on Monday. This report was funded by Progress Energy Canada, a unit of Malaysia’s Petronas.
Petronas is also developing an LNG export project in B.C. The $11.4 billion Pacific NorthWest LNG project planned for Lelu Island in the Port of Prince Rupert is currently awaiting the final decision from the Canadian Environmental Assessment Agency.
According to the report by Conference Board, despite the current downturn in crude oil prices, developing the LNG industry in British Columbia would open up new markets for Canada’s natural gas.
Findings of the report are based on the potential impacts of a 30 mtpa LNG industry in British Columbia over a period from 2016 to 2045. This means, a potential development of two large-scale projects of up to 12 mtpa production capacity and one smaller-scale project of up to 6 mtpa capacity.
An LNG industry of that size would mean doubling the 2014 production numbers by producing additional 5 billion cubic feet of natural gas per day. This would require an annual investment of $7 billion, the report shows.
This would generate approximately $1.06 in GDP for Canada for each dollar invested, reaching the predicted annual level of $7.4 billion. It would also bring in around $808 million and $577 million in tax revenues for the provincial and federal governments, respectively.
Conference Board based its analysis on its long-term natural gas price forecast which predicts that the North American natural gas price benchmark (Henry Hub) will increase from US$2.85 per MMbtu in 2015 to US$7.94 by 2035.
It notes that together with increased drilling activity, government revenues from the industry would reach up to $6 billion per year.
1 Canadian dollar = 0.740971 U.S. dollars
LNG World News Staff