Alberta
Japan PM sees LNG Canada as a ‘flagship’ facility to help improve world energy security while lowering emissions
Prime Minister of Japan Fumio Kishida speaks during the G7 summit at Schloss Elmau, Germany on June 26, 2022 as (L-R) Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Schulz look on. Getty Images photo
From the Canadian Energy Centre Ltd.
Kishida is expected to ask for Canadian LNG as the country looks to replace Russian gas supplies
Japanese Prime Minister Fumio Kishida sees the LNG Canada terminal under construction at Kitimat, B.C. as a “flagship” facility, he said in remarks Jan. 12 during a visit to Ottawa to meet with Prime Minster Justin Trudeau.
“LNG will indeed play a crucial role in striking a balance between energy security and decarbonization,” he said.
“LNG Canada is a flagship project making maximum use of the latest technologies of Japanese companies.”
Resource-poor Japan is the world’s largest LNG consumer, using the fuel to generate electricity, power industry, and heat homes and businesses. Qatar is one of Japan’s largest LNG suppliers.
Kishida is expected to ask for Canadian LNG as the country looks to replace Russian gas supplies. Japan, a relatively short distance from the LNG Canada project compared to terminals on the U.S. Gulf Coast, imported nearly 75 million tonnes of LNG in 2020 – worth over $30 billion.
Kishida’s visit comes just months after German Chancellor Olaf Scholz visited Ottawa also seeking Canadian LNG. Prime Minister Trudeau questioned the business case for shipping Canadian LNG to Europe.
Germany, moving swiftly to reduce reliance on natural gas flows from Russia, built an LNG import facility in just 194 days and recently received its first shipment from the U.S. It also signed an agreement with Qatar to receive 2 million tonnes of LNG per year for 15 years starting in 2026. Germany will open a second LNG import terminal in January.
While Canadian LNG can help alleviate the challenge in Europe, the larger long-term opportunity is in Asia, according to energy consultancy Wood Mackenzie.
Module delivery, LNG Canada site, Kitimat, B.C., July 2022. Photo courtesy LNG Canada
“For Asian buyers, Canadian LNG is quite cost competitive due to its relatively low shipping and liquefaction costs compared to other global exporters,” says Dulles Wang, Wood Mackenzie’s director of Americas gas and LNG research.
As of July 2022, Japan had 92 operating coal plants, 6 under construction and 1 in pre-construction, says Global Energy Monitor. Construction of new coal-fired power plants is occurring mostly in Asia, with China accounting for 52 per cent of the 176 gigawatts of coal capacity being built in 20 countries in 2021, says a New Scientist report.
“If Canada increases its LNG export capacity to Asia, net emissions could decline by 188 million tonnes of CO2 equivalent per year through 2050 – or the impact every year of taking 41 million cars off the road,” according to Wood Mackenzie analysis.
Asia drives 67 per cent of global LNG demand today, and that share is expected to grow to 73 per cent by 2050 as world consumption doubles to 700 million tonnes per year.
“Starting in 2027, we see there’s going to be a global supply/demand gap that is probably going to grow to 120 million tonnes per annum and about 150 million tonnes per annum by 2035,” says Matthias Bloennigen, Wood Mackenzie’s director of Americas upstream consulting.
“Developing western Canadian LNG would be helpful to alleviate the LNG demand that’s going to develop in the world.”
The unaltered reproduction of this content is free of charge with attribution to Canadian Energy Centre Ltd.
Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:
“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.
“This is precisely what I have been advocating for from the U.S. administration for months.
“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.
“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.
“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.
“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”
From the Fraser Institute
By any measure, Alberta is an energy powerhouse—within Canada, but also on a global scale. In 2023, it produced 85 per cent of Canada’s oil and three-fifths of the country’s natural gas. Most of Canada’s oil reserves are in Alberta, along with a majority of natural gas reserves. Alberta is the beating heart of the Canadian energy economy. And energy, in turn, accounts for one-quarter of Canada’s international exports.
Consider some key facts about the province’s energy landscape, as noted in the Alberta Energy Regulator’s (AER) 2023 annual report. Oil and natural gas production continued to rise (on a volume basis) in 2023, on the heels of steady increases over the preceding half decade. However, the dollar value of Alberta’s oil and gas production fell in 2023, as the surging prices recorded in 2022 following Russia’s invasion of Ukraine retreated. Capital spending in the province’s energy sector reached $30 billion in 2023, making it the leading driver of private-sector investment. And completion of the Trans Mountain pipeline expansion project has opened new offshore export avenues for Canada’s oil industry and should boost Alberta’s energy production and exports going forward.
In a world striving to address climate change, Alberta’s hydrocarbon-heavy energy sector faces challenges. At some point, the world may start to consume less oil and, later, less natural gas (in absolute terms). But such “peak” consumption hasn’t arrived yet, nor does it appear imminent. While the demand for certain refined petroleum products is trending down in some advanced economies, particularly in Europe, we should take a broader global perspective when assessing energy demand and supply trends.
Looking at the worldwide picture, Goldman Sachs’ 2024 global energy forecast predicts that “oil usage will increase through 2034” thanks to strong demand in emerging markets and growing production of petrochemicals that depend on oil as the principal feedstock. Global demand for natural gas (including LNG) will also continue to increase, particularly since natural gas is the least carbon-intensive fossil fuel and more of it is being traded in the form of liquefied natural gas (LNG).
Against this backdrop, there are reasons to be optimistic about the prospects for Alberta’s energy sector, particularly if the federal government dials back some of the economically destructive energy and climate policies adopted by the last government. According to the AER’s “base case” forecast, overall energy output will expand over the next 10 years. Oilsands output is projected to grow modestly; natural gas production will also rise, in part due to greater demand for Alberta’s upstream gas from LNG operators in British Columbia.
The AER’s forecast also points to a positive trajectory for capital spending across the province’s energy sector. The agency sees annual investment rising from almost $30 billion to $40 billion by 2033. Most of this takes place in the oil and gas industry, but “emerging” energy resources and projects aimed at climate mitigation are expected to represent a bigger slice of energy-related capital spending going forward.
Like many other oil and gas producing jurisdictions, Alberta must navigate the bumpy journey to a lower-carbon future. But the world is set to remain dependent on fossil fuels for decades to come. This suggests the energy sector will continue to underpin not only the Alberta economy but also Canada’s export portfolio for the foreseeable future.
Jock Finlayson
Senior Fellow, Fraser Institute
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