Pacific Energy reports that Middle East buyers are interested in LNG cargoes coming from Canada.

The president of Woodfibre's LNG project in Canada said that buyers in the Middle East were looking for liquefied gas from Canada to hedge against geopolitical turmoil.

Ratnesh Bedi is the president of Singapore's?Pacific?Energy, which holds a 70% stake on Canada’s Pacific Coast, near Squamish in B.C. In an interview, Bedi said that his company has received inquiries from Middle Eastern customers even though the project’s 2.1million tonnes per year capacity is already contracted to BP. This interest is part of a larger trend among global LNG purchasers who are looking to diversify their supply sources following the disruptions caused by the Strait of Hormuz and the Iran war. Even the Middle East, which is one of the world's largest LNG producers, wants to ensure a backup supply that does not involve geopolitical obstacles like those that threaten its exports.

"Nearly every week, someone approaches us and asks, "hey, do you have capacity?" Bedi said. "I find it very interesting that not only are LNG suppliers from the Middle East coming but also north Asia," Bedi said. Bedi refused to identify the companies. A spokesperson for Canada's energy minister Tim Hodgson confirmed that Middle Eastern buyers expressed interest in not only?investing into the Canadian LNG industry, but also in securing LNG cargoes. Canada is the fifth largest natural gas producer in the world.

Charlotte Power, a spokeswoman for the federal government, said in an email that Middle Eastern companies have expressed a?strong desire to pursue?both LNG investments and offtake agreements.

Woodfibre is one of many LNG facilities being built on Canada's West Coast. Bedi stated that the first cargo export shipment is expected to be in December 2027. Bedi says that the project's geographical location allows for faster shipping to Asian markets compared with U.S. Gulf Coast exporters of LNG. Asian customers also show increasing interest in Canada, he said.

Bedi says that the war in Iran, and the disruptions caused by the Strait of Hormuz, have changed how LNG buyers view their portfolios. Globally, buyers are increasingly looking for geographic diversification to be able to obtain emergency supplies without having to rely on the global spot markets.

He said Canada is able to benefit from this, as its west coast LNG sector is not exposed to any geopolitical stumbling blocks such as a narrow strait that could be blocked or closed.

Bedi stated that "(buyers) are considering what-if scenarios." Bedi said that they are thinking about what-if scenarios.

LONG-TERM DEALS In the past few months, Germany's SEFE, and Uniper, have signed long-term agreements to purchase LNG from another Canadian project, Ksi Lisims. MidOcean, backed by EIG, Saudi Aramco and other investors, purchased Petronas stakes in LNG Canada in the last year. This is another sign of international interest in Canada’s liquefied gas industry.

Bedi stated that despite the low price of natural gas in Western Canada, Canada remains an expensive jurisdiction to develop a LNG project because its lengthy regulatory process can add years to project schedules. Bedi said he was encouraged by the recent efforts of?Canadian PM Mark Carney to accelerate permitting times for energy project.

Bedi did not exclude the possibility of a future expansion of Woodfibre, but he said that its supporters are still not at this point. "The market demand is very exciting. The government's support is exciting. "We are at a critical point in our project, where we must bring it to a successful conclusion," he said. (Reporting and editing by Sanjeev Mglani in Calgary)

(source: Reuters)