Canadian Energy Centre
North America LNG project cost competitiveness

Construction workers look on at the FortisBC Tilbury LNG expansion project in Delta, B.C., Monday, Nov. 16, 2015. CP Images photo
From the Canadian Energy Centre
Lower costs for natural gas, shipping and liquefaction give Canada an edge in the emerging global LNG market
Worldwide concerns about energy security have put a renewed focus on the international liquefied natural gas (LNG) industry. The global demand for LNG is expected to increase over the next few decades.
Global demand growth will be driven primarily by Asian markets where the need for LNG is expected to increase from 277 million tonnes (MT) in 2025 to 509 MT by 2050 (see Figure 1). By 2050 the demand for LNG in Europe will be 83 MT and in Africa 20 MT. In South America too, demand will increase – from 13 MT in 2025 to 31 MT in 2050.

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.
In North America (Canada, Mexico, and United States) a number of LNG projects that are either under construction or in the planning stages will benefit from the rise in global LNG demand.
North American LNG production is expected to grow from 112 MT in 2025 to over 255 MT by 2050 (see Figure 2). In Canada, the LNG projects under construction or in the planning stages include LNG Canada Phases 1 & 2, Woodfibre LNG, Cedar LNG, the Tilbury LNG expansion, and Ksi Lisims LNG. Canada’s LNG production is expected to grow from just 2 MT in 2025 to over 43 MT by 2050. In the United States production is projected to increase from 108 MT in 2025 to 210 MT in 2050.

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.
This CEC Fact Sheet uses Rystad Energy’s Gas and LNG Markets Solution¹ to benchmark the cost competitiveness of LNG projects that are under construction and proposed in Canada compared to other LNG projects under construction and planned elsewhere in North America. (Note that the content of this report does not represent the views of Rystad Energy.)
The LNG cost competitiveness benchmarking analysis used the following performance metrics:
- LNG plant free-on-board (FOB) cost break-even;
- Total LNG plant cost (for delivery into Asia and Europe).
The objective of this LNG cost competitiveness benchmarking is to compare the competitiveness of Canadian LNG projects against those of major competitors in the United States and Mexico. The selection of other North American LNG facilities for the benchmark comparison with Canadian LNG projects (LNG Canada, the Tilbury LNG Expansion, Woodfibre LNG, Cedar LNG, and Ksi Lisims LNG) is based on the rationale that virtually all Canadian LNG plants are under construction or in the planning stage and that they compare well with other North American LNG plants that are also under construction or are being planned between 2023 and 2050. Further, to assess the cost competitiveness of the various LNG projects more accurately, we chose only North American LNG facilities with sufficient economic data to enable such a comparison. We compared the cost competitiveness of LNG coming from these other North American projects with LNG coming from Canada that is intended to be delivered to markets in Asia and Europe.
1. Rystad Energy is an independent energy research company providing data, analytics, and consultancy services to clients around the globe. Its Gas and LNG Markets Solution provides an overview of LNG markets worldwide. The Solution covers the entire value chain associated with gas and LNG production, country and sector-level demand, and LNG trade flows, infrastructure, economics, costs, and contracts through 2050. It allows for the evaluation of the entire LNG market infrastructure, including future planned projects, as well as the benchmarking of costs for LNG projects (Rystad Energy, 2024).
Comparison of LNG project FOB cost break-even (full cycle)
Figure 3 provides a comparison of the free-on-board (FOB) cost break-even for LNG facilities under construction or being planned in North America. FOB break-even costs include upstream and midstream costs for LNG excluding transportation costs (shipping) as seen from the current year. Break-even prices assume a discount rate of 10 percent and represent the point at which the net present value for an LNG project over a 20- to 30-year period becomes positive, including the payment of capital and operating costs, inclusive of taxes.
Among the selected group of North American LNG projects are Canadian LNG projects with an FOB break-even at the lower end of the range (US$7.18 per thousand cubic feet (kcf)) to those at the higher end (US$8.64 per thousand cubic feet (kcf)).
LNG projects in the United States tend to settle in the middle of the pack, with FOB break-even between US$6.44 per kcf and US$8.37 per kcf.
Mexico LNG projects have the widest variation in costs among the selected group of projects, ranging from US$6.94 per kcf to US$9.44 per kcf (see Figure 3).

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.
Total costs by project for LNG delivery to Asia and Europe
The total cost by LNG plant includes FOB cost break-even, transportation costs, and the regasification tariff. Figure 4 compares total project costs for LNG destined for Asia from selected North American LNG facilities.
Canadian LNG projects are very cost competitive, and those with Asia as their intended market tend to cluster at the lower end of the scale. The costs vary by project, but range between US$8.10 per kcf and US$9.56 per kcf, making Canadian LNG projects among the lowest cost projects in North America.
The costs for Mexico’s LNG projects with Asia as the intended destination for their product tend to cluster in the middle of the pack. Costs among U.S. LNG facilities that plan to send their product to Asia tend to sit at the higher end of the scale, at between US$8.90 and US$10.80 per kcf.

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.
Figure 5 compares total project costs for LNG to be delivered to Europe from select North American LNG facilities.
Costs from U.S. LNG facilities show the widest variation for this market at between US$7.48 per kcf and US$9.42 per kcf, but the majority of U.S. LNG facilities tend to cluster at the lower end of the cost scale, between US$7.48 per kcf and US$8.61 per kcf (see Figure 5).
Canadian projects that intend to deliver LNG to Europe show a variety of costs that tend to cluster at the middle to higher end of the spectrum, ranging from US$9.60 per kcf to and US$11.06 per kcf.
The costs of Mexico’s projects that are aimed at delivering LNG to Europe tend to cluster in the middle of the spectrum (US$9.11 per kcf to US$10.61 per kcf).

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.
Conclusion
LNG markets are complex. Each project is unique and presents its own challenges. The future of Canadian LNG projects depends upon the overall demand and supply in the global LNG market. As the demand for LNG increases in the next decades, the world will be searching for energy security.
The lower liquefaction and shipping costs coupled with the lower cost of the natural gas itself in Western Canada translate into lower prices for Canadian LNG, particularly that destined for Asian markets. Those advantages will help make Canadian LNG very competitive and attractive to markets worldwide.
Canadian Energy Centre
RBC says Canada’s Indigenous owned energy projects are ‘economic reconciliation in action’

Eva Clayton, back left, President of the Nisga’a Lisims Government (joint venture owner of the proposed Ksi Lisims LNG project), Crystal Smith, back right, Haisla Nation Chief Councillor (joint venture owner of the Cedar LNG project, now under construction), and Karen Ogen, front right, CEO of the First Nations Natural Gas Alliance pose for a photograph on the HaiSea Wamis zero-emission tugboat outside the LNG2023 conference, in Vancouver, B.C., Monday, July 10, 2023. CP Images photo
From the Canadian Energy Centre
As construction gets underway on Cedar LNG, the world’s first Indigenous majority-owned LNG export terminal, a report from RBC highlights the project as a model of successful energy development in Canada.
“We broke a pattern that had existed for over a century,” said Karen Ogen, CEO of the First Nations Natural Gas Alliance.
“First Nations have been at the heart of the LNG opportunity, not on the sidelines or just on the job sites but in the boardrooms helping to make it happen.”
RBC said the Cedar LNG project in Kitimat, B.C. – a partnership between the Haisla Nation (50.1 per cent) and Pembina Pipeline Corporation (49.9 per cent) – is a model for Indigenous economic reconciliation in action.
“Canada’s future growth and prosperity depends heavily on getting Indigenous economic reconciliation right,” said report co-author Varun Srivatsan, RBC’s director of policy and strategic engagement.
“If not, the country’s ability to diversify our resource exports, enjoy independence and resiliency in strategic sectors, and improve productivity, which has lagged that of other countries for years, are all at risk.”
RBC outlined the enormous potential of Indigenous-led energy projects to drive economic growth.
Almost three-quarters of the 504 major resource and energy projects planned or underway in Canada run through or are within 20 kilometres of Indigenous territories.
The value of Indigenous equity opportunity from these projects is estimated at $98 billion over the next 10 years, with oil and gas projects dominating the list at $57.6 billion.
“It’s clear that First Nations are critical to LNG in Canada. It’s First Nations territory from where the gas is extracted in Treaty 8 territory, it’s First Nations territory across which gas is transported via pipeline, it’s First Nations territory where LNG terminals are located, and it’s First Nations waters through which carriers take LNG to market. This is why we say Canadian LNG is Indigenous LNG. And we are going to make history,” Ogen said.
Cedar LNG reached a final investment decision last June, following a permitting process that saw the Haisla Nation directly involved in planning the facilities and operations.
This includes a floating LNG terminal with emissions among the world’s lowest, at 0.08 per cent CO2 equivalent per tonne of LNG compared to the global average of 0.35 per cent. Operations are slated to start in late 2028.
“Our community felt it was important that our values of being Haisla, being Indigenous, were felt through every decision that was being made. That is what makes this project unique,” said Crystal Smith, the Haisla Nation’s elected chief councillor.
Central to the Haisla’s involvement in Cedar LNG are the jobs and ongoing revenues that benefit the nation and neighbouring communities.
This has included support for education and cultural programs and building a state-of-the-art health facility and a new housing development.
“Cedar LNG shows what is achievable when you have a shared vision,” Smith said.
“It is going to mean that my kids and grandkids have a different future from what I or anybody in my generation have experienced in our community. It is going to revive our culture, revive our language, and make us stronger going forward.”
Alberta
As LNG opens new markets for Canadian natural gas, reliance on U.S. to decline: analyst

From The Canadian Energy Centre
By Cody Ciona
Starting with LNG Canada, producers will finally have access to new customers overseas
Canada’s natural gas production and exports are primed for growth as LNG projects come online, according to Houston, Texas-based consultancy RBN Energy.
Long-awaited LNG export terminals will open the door to Asian markets and break the decades-long grip of the United States as the sole customer for Canada’s natural gas.
RBN projects that Canada’s natural gas exports will rise to 12 billion cubic feet per day (bcf/d) by 2034, up from about 8 bcf/d today. But as more LNG terminals come online, less of that natural gas will head south.
“We think the real possibility exists that the amount of natural gas being exported to the United States by pipeline will actually decline,” said Martin King, RBN’s managing director of North America energy market analysis, on a recent webinar.
RBN’s analysis suggests that Canada’s natural gas exports to the United States could drop to 6 bcf/d by the early 2030s compared to around 8 bcf/d today.
With the first cargo from the LNG Canada terminal at Kitimat, B.C. expected to ship in late June, Canada will finally have access to new markets for natural gas. The first phase of the project will have capacity to ship about 1.8 bcf/d.
And more projects are on the way.
LNG Canada’s joint venture partners are considering a second phase that would double export capacity.
Also at Kitimat, the Cedar LNG project is under construction and is expected to be completed in 2028. The floating terminal led by the Haisla Nation will have capacity to export 0.4 bcf/d.
Woodfibre LNG, located near Squamish, B.C. began construction in late 2023 and is expected to be substantially completed by 2027, with export capacity of about 0.3 bcf/d.
Expansions of LNG Canada and Cedar LNG could put LNG exports into the range of 5 bcf/d in the early 2030s, King said.
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