In the early fall of 2008, the proponents of a planned liquefied natural gas import facility in Kitimat did a 180-degree turn on plans for a regasification plant on British Columbia's West Coast and instead decided to develop an export terminal.
Rising natural gas demand in Asia and increases in supply throughout North America -- including in the United States, Canada's traditional export market -- led to significantly higher natural gas prices in Asia than North America. This provided Kitimat LNG with a compelling opportunity to export natural gas across the water to the lucrative Asian market.
In the U.S., an advantage of building first is that if these projects actually reach construction, the Department of Energy may decide at some point not to approve any further export permits if it thinks that additional exports will have an adverse impact on American consumers of gas, said Kelly Bennett, manager of the international energy group with BENTEK Energy LLC.
"Cove Point has also announced that it is exploring the option [to export] but it is not an officially proposed project," Bennett said.
As for West Coast LNG proposals in Oregon and California, BENTEK's opinion is that none of these projects will come to fruition, either as import or export terminals.
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