Tourmaline Oil Corp., Canada’s largest natural gas producer, has started shipping the fuel on a roundabout, 3,000-mile journey from northeast British Columbia to Chicago and then southbound to an LNG-chilling facility on the Gulf Coast in Texas. From there, it’s being shipped to ports in Asia or Europe on voyages that can range from 5,000 to 17,000 nautical miles, depending on the route.
The gas’s journey is believed to be the longest path from a natural gas well to a liquefaction facility in the world. It’s also the first significant amount of Canadian gas to be contracted for markets beyond North America, a milestone for an industry that has struggled with heavily discounted prices because of a lack of domestic LNG facilities.
Tourmaline is being paid around US$20 per thousand cubic feet for its gas, minus 86 cents for pipeline transportation costs and undisclosed liquefaction and shipping costs. The current price of natural gas at Canada’s AECO hub is $2.05. With local gas prices languishing and domestic LNG projects stalled, multiple Canadian producers have cast about for export options. ARC Resources Ltd. and Seven Generations Energy, which are now combined, have also signed supply agreements with U.S. Gulf Coast liquefaction terminals, but those supply deals don’t begin until 2025. ARC didn’t respond to requests for comment.
ellisbross has been hammering away at governments and regulators for years, with the real solutions, but few have listened.