By the end of the decade capacity to export liquefied natural gas (LNG) from Western Canada will be 3-5 Bcf/d, which isn’t much less than total exports of Canadian gas to the United States, about 5.5 Bcf/d, according to analysts at Arc Financial Corp.

“It’s possible that all southbound Canadian exports could be redirected westward to higher-value markets,” the firm’s analysts said in a note Monday.

From the perspective of producers in the Western Canadian Sedimentary Basin, that’s a lot of gas. But in the Asia-Pacific region, not so much. The analysts said even robust exports from Canada would be unable to push down prices in gas-hungry Asian markets, where consumption is increasing exponentially.

“Not only is the Asia-Pacific growth rate…staggering (at an average), so is the region’s level of overall natural gas consumption,” they wrote. “A five-year compounded growth rate of 7.3% on 54.9 Bcf/d means that over 4.0 Bcf/d of new gas is needed every year to fuel economic growth and substitute for the nuclear power vacuum that Japan’s Fukushima nuclear crisis created earlier this year.”

Put another way, potential future Canadian exports would cover about one year’s worth of Asia-Pacific demand growth.

“…Canada’s future LNG exports are not nearly large enough to weigh down Asia-Pacific prices and will be much more impactful to boosting our domestic [Canadian] natural gas prices to global standards,” the firm said.

Several projects are in various stages of development to export LNG from Western Canada. In October the KM LNG partnership of Apache Canada, EOG Resources Canada and Encana Corp. was granted a license to proceed to construction of its proposed C$5.5 billion (U.S. dollar at par) terminal at Kitimat on the northern Pacific coast of British Columbia (see Daily GPI, Oct. 17).

“I think we’ve broadly stated we’d welcome as many LNG export facilities as can be constructed because of the imbalance [in the gas markets] that exists,” Encana CEO Randy Eresman said recently in response to news that Royal Dutch Shell plc was exploring the export of LNG from Western Canada (see Daily GPI, Oct. 24).

©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.