Canada’s only liquified natural gas (LNG) facility began operating last year, yet the country has an opportunity to scale up that industry and become one of the top natural gas exporters in the world, according to a new report.
There are several hurdles to overcome, though, including a lengthy permitting process and a lack of proposed projects by the private sector.
The federal government aims to grow LNG exports to upwards of 100 million tonnes per year.
Currently, one facility is operational with a capacity of 14 million tonnes per year.
Reaching the federal goal could have a significant economic impact, according to the report released Thursday by S&P Global, including nearly a quarter million jobs annually and nearly $1 trillion of investment in the natural gas industry by 2050.
“If Canada can address its permitting issues and its cost issues, Canada can play a very big role in global LNG, which would be obviously beneficial for the Canadian economy and would help to globalize its economy and make its economy less dependent upon on its neighbour to the south,” said Daniel Yergin, vice-chairman of S&P Global, in an interview with CBC News.
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Western Canada has a vast amount of natural gas, which can be produced at some of the lowest costs in North America.
However, building pipelines to transport the gas to the West Coast from Alberta and northeast B.C. has been a complex and expensive process.
The Coastal GasLink project, which was developed by TC Energy and is partly-owned by local First Nations, faced several delays and cost overruns. The project was opposed by various Indigenous communities and environmentalists. The pipeline project crosses about 625 lakes, rivers, creeks, wetlands and streams in northern B.C.
Some experts have said Canada will never be an LNG-exporting superpower because it has been so difficult to develop and construct energy infrastructure. There is also competition from many other countries that are wanting to attract LNG investment, including the U.S.
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Canada’s permitting process has taken 27 months longer compared to Texas, and pipelines cost 160 per cent more to build, according to the S&P report.
The federal government has introduced new legislation aimed at speeding up regulatory reviews.
LNG Canada is the only LNG export facility in the country, although six others are either under construction or in development. Altogether, they would produce just over 50 million tonnes of LNG each year.
S&P Global vice-chairman Daniel Yergin appears on stage at CERAWeek in Houston on March 10, 2025. Yergin says Canada has many advantages and hurdles to grow its LNG sector. (Kaylee Greenlee/Reuters)
One of the big secrets in the global energy industry is the size of Canada’s oil and natural gas, said Yergin, along with its geographical advantage of a relatively short shipping route to Asia.
“Asian buyers want that LNG from Canada,” said Yergin, along with other countries around the world, especially considering how the conflict in the Middle East this year has disrupted the global natural gas market. In Europe, there are concerns about the high cost of gas to heat homes as the winter months approach.
“There’s a strong interest in diversification. There’s a conviction that you have to build security and resilience into your system. You need a diversified portfolio, and it would be beneficial to have resources that don’t have to go through choke points. And so all of those things point to advantages that Canada has right now,” he said.
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Prime Minister Mark Carney has a lot of credibility on the world stage, said Yergin, but investors will want to see proof of permitting reform since lengthy wait times can be very costly for companies.
Demand for natural gas is expected to grow over the coming decades due to a variety of factors, ranging from the world’s growing population to power demand from AI data centres and air conditioning.
Canadian LNG has 55 per cent lower greenhouse gas intensity compared with similar projects in other countries, according to S&P Global.
