With tariffs and conflict in the Middle East creating global uncertainty, Premier David Eby is planning a trade mission to China as he continues working to diversify B.C.’s trading partners and make connections in Asian markets.
And a trade expert says liquefied natural gas (LNG) exports could now be a major topic of discussion as the war in Iran complicates supply certainty for several Asian nations.
“There is market potential for LNG under these changed circumstances,” said Werner Antweiler, an energy and trade expert at the University of British Columbia’s Sauder School of Business.
Eby’s China trip follows a similar trade mission to Malaysia, South Korea and Japan last year; and a visit to India in January. Prime Minister Mark Carney has also been making the rounds, visiting China in January.
Eby revealed the plans while speaking with reporters in Surrey on Thursday, saying the trip will focus on agricultural trade and mutually beneficial energy trade. Dates and other details of the trip have not yet been finalized.
As he did during his trip to India, Eby plans to deliver the message that B.C. is a predictable and dependable trading partner amidst global uncertainty, caused first by U.S. tariffs and now by the war in Iran.
“We are a stable jurisdiction in a very unstable time,” he said.
Iranian attacks impacting global gas supplies
Eby said that while recent Iranian attacks on Qatari gas facilities have caused massive infrastructure loss, B.C. has six LNG export facilities that are either complete, under construction or nearing final investment decision.
This includes LNG Canada Phase 1, which is shipping gas; Woodfibre LNG, which is under construction; Cedar LNG, which is close to beginning construction; and LNG Canada Phase 2, Ksi Lisims LNG and the Prince Rupert Gas Transmission Line, which are all awaiting final investment decision.
Eby said he reckons that the people making those final investment decisions will take into account what is happening in the Middle East.
“It just underlines our case, as tragic as it is, that British Columbia is a safe place in an incredibly uncertain world,” he said.
Antweiler agrees with this assessment, arguing that the war may mean Asian nations are willing to pay more for Canadian gas to ensure a steady supply.
B.C. LNG is currently being shipped to China, Taiwan, South Korea and Japan, and much of it is used to generate electricity, he said.
“They may be willing to pay a premium for diversification,” he said.
Qatar, which was attacked in retaliation for the U.S. and Israeli bombardment of Iran, is one of the largest and cheapest LNG producers.
Now, Canadian LNG proponents can argue that B.C. produces a cleaner — because it uses hydro power — and more reliable source of gas than cheaper alternatives.
“I have no doubt that the Canadian proponents of these projects will be pushing hard to say, ‘Well, now we have LNG that is both safer and maybe cleaner — Are you willing to pay a premium for that kind of gas?’ Antweiler said. “That is the business case they’re making.”
He said Asian countries are likely looking at the long-term impacts of the conflict on future gas supply. This includes whether the conflict itself continues and if it destabilizes the region for years to come.
“That’s a risk assessment that is being made right now,” he said.
Ultimately, Antweiler said he thinks the conflict will benefit Canadian LNG, just as several new projects are on the table.
“And that could lift them over the threshold where a final investment decision could be made,” he said.