Middle Eastern buyers are seeking LNG cargoes from Canada to diversify supply and hedge against geopolitical disruption affecting key shipping routes, Reuters reported on Friday.
Singapore-based Pacific Energy, which owns a 70% stake in the Woodfibre LNG project under construction near Squamish on Canada’s Pacific coast, is receiving inquiries from Middle Eastern buyers, according to an interview with Ratnesh Bedi, the company’s president.
The interest comes despite the project’s 2.1 million tonnes per year of capacity being fully contracted to BP, and has emerged as the war in Iran and disruption in the Strait of Hormuz prompt LNG buyers to seek supply routes that avoid geopolitical chokepoints.
“Almost every week, someone is approaching us to say, ‘Hey, do you still have capacity?’ Very interestingly, not only is it North Asia that is coming, but to my surprise, even LNG suppliers out of Middle East are coming to find alternate supplies for their customers.,” said Bedi.
Woodfibre LNG is targeting December 2027 for its first export cargo and is one of several LNG facilities under construction on Canada’s west coast. Its location provides shorter shipping times to Asian markets than US Gulf Coast exporters and avoids maritime chokepoints, according to Bedi.
The interest forms part of a wider increase in international investment and contracting activity in Canada’s LNG industry. Germany’s SEFE and Uniper have signed long-term offtake agreements with the Ksi Lisims project in recent months, while EIG and Saudi Aramco-backed MidOcean acquired an interest in Petronas’ stake in LNG Canada last year.
“The federal government has heard strong interest from Middle Eastern companies in pursuing both LNG equity investments and offtake deals,” said Charlotte Power, spokeswoman for Canada’s Energy Minister, Tim Hodgson.
Pacific Energy is an independent energy resources developer operating across the gas value chain in Canada and Asia. Its activities include gas exploration, development and production in Canada through Pacific Canbriam Energy, the Woodfibre LNG export project and LNG receiving terminals and gas-fired power generation in China.