Canada Gas Future Bright, But Oil is Uncertain

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Looking to expand non-U.S. exports, the Canadian government said it expected more of its natural gas to be converted to LNG. The outlook for crude oil, however, is uncertain.

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LNG to Absorb Some Canadian Production

About 25% of the total natural gas production in Canada eventually will be tied to exports of liquefied natural gas (LNG), a federal regulator said.

Canada is among the top natural gas producers in the world, and a net exporter to the U.S. economy. On Wednesday, IIR Energy in its NATGAS Today report found Canada delivered 5.75 billion cubic feet (Bcf) of gas to the U.S. economy.

The Canada Energy Regulator said it expected overall natural gas production to expand. Production last year averaged 19 billion cubic feet per day (Bcf/d), and the government expects levels to reach 32 Bcf/d at the high end by 2050.

"The scale of production growth, and whether Canada reaches markets beyond the United States, depends heavily on future LNG export capacity," the government said. "By 2050, about a quarter of total Canadian gas production is tied to LNG exports, making LNG one of the viable pathways for expanding Canada's energy trade outside North America."

Canadian Prime Minister Mark Carney included LNG exports as part of a trade diversification strategy. Facing trade threats from U.S. President Donald Trump, Carney is working to halve U.S. trade over the coming years.

In terms of exports from the Pacific Coast, Canada is ahead of the game as the only nation with the infrastructure necessary to deliver from the coast. LNG Canada, backed primarily by Shell plc, features two trains, or liquefaction units, that can combine for 14 million metric tons per annum (MTPA) of gas in liquid form. It reached 50 cargos by February, following debut deliveries last year.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Plant Database can click here for the plant profile.

The Cedar LNG and the Woodfibre facilities are two other projects that are considered high-probability in Industrial Info's database. Cedar LNG is a partnership between the indigenous Haisla Nation and Pembina Pipeline. It will feature a floating facility off the coast of British Columbia with a design capacity of 3.3 MTPA. Construction began in June. Woodfibre, a subsidiary of Pacific Energy, would have a design capacity of 2.1 MTPA. Construction began in October.

Both should be completed before the decade is out.

GMI subscribers have access to the Cedar LNG and Woodfibre project reports.

Uncertain Future for Crude Oil

The future is mixed for crude oil, however. Total foreign deliveries up to December 2024 averaged 4.2 million barrels per day (BBL/d). That increased to 4.3 million BBL/d by December 2025, with levels last year reaching as high as 4.6 million BBL/d.

In terms of production, the federal government said output could increase 18% or decline 12% by 2050, depending largely on crude oil prices. Canadian oil typically trades at a discount to other benchmarks, because it's largely limited to North American markets.

"In the higher production scenarios, Canada continues to send most of its oil exports to the U.S. if existing pipeline infrastructure is used much like it is today, as production changes alone do not significantly shift long standing export patterns," the regulator said.

Canadian infrastructure limits exports largely to the U.S. The Trans Mountain network is currently the only midstream artery capable of delivering Canadian crude oil outside of North America. An expansion project completed in May 2024 nearly tripled the capacity on the pipeline system to 890,000 BBL/d.

By the Numbers

• $10 million in early support for a new oil export pipeline
• 5.4 MTPA in high-probability LNG export projects in Canada

Alberta's government committed US$10 million last year to support early engineering work, cost estimates and community engagement for a proposed new pipeline. Once those steps are completed, the provincial government said it expected the private sector to take up the project from there.

The so-called Northwest Coast Oil Pipeline already includes Calgary-based energy companies Enbridge, Trans Mountain and South Bow on its advisory committee.

Key Takeaways

• LNG expanding in federal scenarios.
• Oil trajectory depends on market prices.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).