Liquefied Natural Gas
An emerging industry offers an opportunity to bring economic benefits to Canadians and environmental benefits to the world.
What is Liquefied Natural Gas (LNG)?
Natural gas, when produced and used in Canada, is shipped as a gas through pipelines to a local distribution company and then delivered to customers.
When natural gas is shipped to distant foreign markets, the natural gas is cooled to -161°C to become a liquid.
As the majority of Canada’s natural gas resources are in B.C. and Alberta, the best place to establish new LNG processing and shipping facilities is on Canada’s West Coast, which is close to potential new markets in Southeast Asia, India and China.
Is LNG A Missed Opportunity?
In 2015, the United States and Canada shared similar profiles in the natural gas market: both were energy superpowers capable of producing more natural gas than they used at home, and both had a shared issue— little infrastructure to export it. As a result, industry in both countries undertook a flurry of LNG export facility proposals. At one time, 13 LNG facilities were proposed in B.C., and five in Central and Atlantic Canada. Unfortunately, Canada’s extended regulatory timelines and complicated legal system have become roadblocks to international investment. In the years between 2014 and 2020 the United States built seven LNG facilities, has five more under construction and an additional 15 approved. In 2022 the United States became the largest exporter of LNG in the world, while most Canadian projects have been cancelled or deferred.
Economic Benefits of LNG
LNG is in high demand as a bridge fuel and will continue to be over the coming decades. While Asian markets continue to demand LNG, European markets have also begun to propose LNG import capacity to decrease their reliance on Russian natural gas. Currently the only the world-scale LNG project under construction in Canada is LNG Canada. With an estimated completion by mid-decade it marks the single largest private investment in Canadian history. When built, the plant will initially provide around 6.5 mtpa up to 14 mtpa of LNG with a potential for future expansion to 26 mtpa. Meanwhile the Fortis BC Tilbury LNG plant has also produced small volumes of about 0.25 mtpa of LNG for export. Fortis BC are currently in the process of permitting a 2.5 mtpa expansion that is needed to provide marine bunkering fuel and exports abroad. Woodfibre LNG and Kitimat LNG have also both received regulatory permits.
A New Generation of Indigenous Lead Projects
The next wave of projects all have one thing in common: Indigenous leadership and partnerships. Both the Cedar LNG (3-4 mtpa) led by Haisla Nation and Ksi Lisims LNG (12 mtpa) led by Nisga’a Nation are in the environmental regulatory process.
The LNG Process: How to Liquefy Natural Gas
There are three primary steps involved in creating LNG:
STEP 1: Liquefaction
When raw natural gas arrives at the liquefaction plant, impurities are removed leaving a product that is primarily methane. The natural gas is cooled to about -161°C so it becomes liquid. The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state. The LNG is stored in insulated tanks to keep it cold until ready to ship.
STEP 2: LNG Transportation
LNG is pumped into double-hulled LNG carriers designed to keep the LNG cold and minimize evaporation. LNG carriers can hold up to 9.4 million cubic feet of LNG, equivalent to 5.6 billion cubic feet of natural gas in its natural gaseous state.
STEP 3: Re-gasification
When the LNG carrier arrives at its destination, the LNG is offloaded and stored in insulated storage tanks to keep it cold. When needed, the LNG is warmed to convert it back to a gas and then delivered by pipeline to customers.
Watch this video by Shell explaining how LNG is cooled and transported.
- Natural gas is cooled to -161°C when it becomes liquid.
- LNG is a clear, colourless, odourless, non-toxic liquid.
- LNG carriers can hold up to 9.4 million cubic feet of LNG, which is equivalent to 5.6 billion cubic feet of natural gas in its natural state.
- More than 135,000 LNG carrier voyages have taken place without major accidents, safety problems, or security issues either in port or at sea.(Source: Centre for Liquefied Natural Gas)
LNG and the Environment
LNG can help lower global greenhouse gas (GHG) emissions when it’s used to displace higher-emitting coal for power generation. In addition, life-cycle GHG emissions from Canadian LNG production could be among the lowest in the world with electrification of upstream natural gas production.
Shipping Liquefied Natural Gas Safely
LNG shipping has a proven safety record. The world’s first LNG tanker shipped LNG safely from Louisiana to the United Kingdom in 1959. Through 60 years of marine shipping experience, shipments have covered more than 100 million miles without major accidents, safety problems, or security issues, either in port or at sea. (Source: Center for Liquefied Natural Gas)
LNG carriers are designed to have a high degree of safety:
- Double hulled vessels.
- Separating LNG cargo tanks from the hull structure using thick insulation.
- Closed cargo systems for loading or discharging, to prevent vapour venting
- Temperature and pressure monitoring.
- Gas detection and cargo tank liquid level indicators.
How can Canadian LNG exports drive economic growth in Canada and help lower global greenhouse gas emissions?
The Benefits of LNG
With the recent investment decision by Shell and its partners to build a $40 billion LNG liquefaction facility on Canada’s West Coast, along with other projects planned or in development, the creation of a robust LNG industry is gaining momentum. Learn more about LNG: What is it? What are some potential markets for LNG? What are the expected benefits for Canadians? And how could LNG help lower global greenhouse gas emissions?