Canada’s first liquefied natural gas (LNG) export facility is expected to ship its first cargo imminently.
LNG tanker GasLog Glasgow arrived at LNG Canada (LNGC) over the weekend and is expected to load and ship the facility’s first export cargo in the coming days. The facility began producing LNG last week. But it is expected to run at lower utilization rates during the initial startup of the first train, according to a report from Reuters.
Train 1 has not yet reached full capacity due to an issue with one of its lines. But the shipment of LNGC’s first cargo is proceeding as planned. It is expected that more gas will move west as the facility resolves its initial startup issues.
Canada has substantial natural gas reserves but did not have LNG export capabilities until LNGC. However, with companies capitalizing on export opportunities in British Columbia (BC), the country is poised to emerge as a significant LNG exporter by the end of this decade.
Canada's Growing LNG Export Market
Coastal BC is well-positioned for LNG export facilities due to its proximity to natural gas production and deep-water ports. This offers advantages similar to the U.S. Gulf Coast, a region where most U.S. LNG export capacity is concentrated. However, BC offers the added benefit of faster shipping routes to Asian markets.
In addition to LNGC, BC currently has two other LNG export projects under construction. This includes Woodfibre LNG, in which Enbridge (ENB CN) owns a 30% interest, and Cedar LNG, which is 49.9% owned by Pembina (PPL CN).
See more: Canadian LNG Projects Advance to Meet Asian Demand
Enbridge and Pembina will be directly involved in LNG exports. However, other midstream companies help facilitate LNG exports by connecting production fields in eastern BC with the Western Coast.
TC Energy’s (TRP CN) Coastal GasLink Pipeline, a 2.1-Bcf/d gas pipeline, supplies gas to LNGC. It has the potential for expansion to 5 Bcf/d with added compression. Furthermore, a connector is currently under construction to serve Pembina’s Cedar LNG.
Investment Opportunities in Canadian Midstream
Enbridge, TC Energy, and Pembina are among the top constituents in the Alerian Energy Infrastructure ETF (ENFR ), with Canadian midstream companies comprising 28.2% of the fund by weight.
ENFR is based on the Alerian Midstream Energy Select Index (AMEI). The index is a composite of North American midstream energy infrastructure companies — including C-corps and MLPs — engaged in the pipeline transportation, storage, as well as processing of energy commodities. ENFR is the lowest-cost ETF in the energy infrastructure category, charging just 35 basis points.
Looking for midstream insights in your inbox? Subscribe here to keep a pulse on midstream investing through our weekly updates.
For more news, information, and analysis, visit the Energy Infrastructure Channel.
VettaFi LLC (“VettaFi”) is the index provider for ENFR, for which it receives an index licensing fee. However, ENFR is not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing or trading of ENFR.
