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Whitebark Energy welcomes plan to build C$40 billion LNG export terminal in Canada

Introduces attractive pricing mechanisms for western Canadian gas, which would positively impact local producers including Whitebark.
Whitebark’s gas asset
Whitebark’s assets are interconnected to major pipelines

Whitebark Energy Ltd (ASX:WBE) has welcomed the decision by LNG Canada to build a C$40 billion LNG (liquefied natural gas) export terminal at Kitimat, British Columbia on the west coast of Canada.

LNG Canada is a consortium which includes Shell, Petronas, Kogas, Petrochina and Mitsubishi.

The export terminal is expected to open up Canada to gas export opportunities, stimulate new demand for gas supply and shift domestic gas pricing towards international parity.

The LNG Canada facility will initially liquefy and export 13 million tonnes per annum (mtpa), or the equivalent of 3.5% of global LNG supply in 2017, potentially expanding to 28 mtpa.

Whitebark Canadian assets and associated major pipeline infrastructure

It is worth noting that Whitebark’s fields are about 600 kilometres to the east of the new pipeline to Kitimat and will be connected to the export facility by a series of interconnected pipelines.

Whitebark managing director David Messina said although most of the initial gas was likely to be supplied by the LNG Canada partners, the construction of the new facility would reduce supply into Whitebark’s traditional markets resulting in stronger gas prices in the domestic market.

READ: Whitebark Energy confirms oil discovery in Western Australia waters

Messina added: “Of particular near-term importance to Whitebark, the construction of LNG Canada’s Kitimat terminal introduces attractive alternate pricing mechanisms for Western Canadian gas, which is likely to lead to export parity, with associated re-rating of asset values, similar to what has been seen with LNG in Queensland.

“Whitebark has been securing reserves, production, development and exploration assets while prices have been depressed and any increase in the gas price will have a positive impact on Whitebark’s assets.

“Our existing production and the emerging Duvernay shale play is an obvious beneficiary as other companies step-up their exploration and development activity to increase reserves.”

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