Nova Scotia’ premier off to Qatar in search of LNG

What a difference a decade makes. Ten years ago, provincial politicians were portraying Nova Scotia’s offshore as the next natural gas frontier—a Houston on the Atlantic. Now, after a decade of failed promises and dry holes, we have the premier of Nova Scotia visiting Qatar apparently in search of liquefied natural gas or LNG.

To be fair, Qatar is the place to visit for LNG, since it has the world’s third largest proven reserves of natural gas (after Russia and Iran) and is the world’s largest exporter of LNG. Presently, all of Qatar’s LNG is spoken for: about 79 percent of its exports are for Asia, 20 percent for Europe, and just over one percent for the United States. US shipments are expected to increase starting in 2009 or 2010 because over the past four years, Exxon-Mobil has been constructing new LNG gasification trains in Qatar and regasification facilities in Texas.

Assuming that the premier can successfully convince someone in Qatar that LNG should be shipped to Nova Scotia—what then?

Proponents have said that when LNG arrives in Nova Scotia, a large petrochemical facility will be built to extract the ethane from the natural gas stream to produce ethylene for plastic products—thereby creating hundreds of jobs. However, both the facility and the jobs will depend upon whether or not the ethane has been removed for commercial purposes by the exporting country.

Some may argue that LNG will help improve Nova Scotia’s energy security by diversifying the province’s energy supply. This argument hinges on four assumptions. First, that Qatar will remain stable, despite being located in an unstable region. Second, that there will be a monumental pipeline construction program to supply Nova Scotians with natural gas. Third, that Nova Scotians will be able to afford natural gas from Qatar, much of which is sold on the spot market. And fourth, that any natural gas from Qatar doesn’t follow the same path taken by most of Nova Scotia’s domestic natural gas—south to the United States.

CBC Radio 1 (Information Morning) Commentary 25 June 2008