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The U.S. North American neighbors are emerging as the latest competitors of the United States to ship LNG to Asia, the world’s biggest and most important LNG-importing region.
While U.S. LNG development has suffered a series of setbacks in recent months, Canada and Mexico are looking to tap the growing Asian market for the super-chilled fuel, analysts tell the Financial Times.
Canada and Mexico each have several LNG export projects under construction and development. These are located on the west coast, thus giving them easier access to Asian markets via the Pacific and no need to pass through the Panama Canal, which has become an LNG cargo chokepoint in recent years.
Canada could potentially supply 36.2 million tons of LNG per year by 2040, and Mexico – another 36.7 million tons, according to estimates by Wood Mackenzie cited by FT.
The potential supply from Canada and Mexico – which have yet to ship LNG to foreign markets – is much smaller than the estimated 325.83 million tons annually that could come from the United States by 2040, per WoodMac.
In 2023, U.S. LNG exports stood at 88 million tons.
Canada has seen about a decade of delays in some LNG export projects, mostly due to permitting issues. But now it has set its sights on the Asian market with several projects, the first of which, Shell-led LNG Canada, is expected to start operations in 2025.
Moreover, in June, the Haisla Nation and Pembina Pipeline Corporation decided to move ahead with the Cedar LNG project, a floating LNG export facility on Canada’s West Coast, and the world’s first indigenous majority-owned LNG project.
Permitting and soaring costs have hampered the LNG export capabilities of Canada and Mexico. But the U.S. has also seen setbacks in the industry.
Surging labor and construction costs are plaguing some major U.S. LNG export projects, while regulatory setbacks have also emerged.
Last month, a U.S. appeals court vacated the authorization of NextDecade Corporation’s Rio Grande LNG export project in Texas on the grounds that the FERC should have issued a supplemental Environmental Impact Statement (EIS) during its remand process.
By Tsvetana Paraskova for Oilprice.com
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The post Canada and Mexico Boost Competition for U.S. LNG Exports to Asia appeared first on Energy News Beat.
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