Liquefied Natural Gas Ltd (ASX: LNG) has seen its shares pop just over 3.5% today, after the company announced that it had filed an application with Canada's National Energy Board (NEB) for an export licence for up to 12 million tonnes per year of liquefied natural gas.
LNG is building an export LNG facility in Canada called Bear Head LNG, which plans to initially produce 8 million tonnes per annum of LNG. That is double what was previously planned.
"Bear Head LNG is targeting a higher rate of production capacity based on market response and gas supply projections. This change also reflects our conversations with regulatory agencies and political leaders," said John Godbold, Bear Head LNG chief operating officer.
He added that Bear Head LNG has a 6-12 month head start against competing projects. LNG expects that the Bear Head LNG facility could be in commercial operation in late 2018 to 2019.
It's the second North American LNG facility the company is developing. LNG is also building the 8 million tonnes per annum Magnolia LNG project in Louisiana, which could be producing LNG in 2017.
Woodside Petroleum Limited (ASX: WPL), Australia's largest independent oil and gas producer is also active in Canada, with a proposed liquefied natural gas export venture in Canada's British Columbia, at Grassy Point. But it's just one of an estimated 10 LNG export ventures proposed on Canada's Pacific coast, according to Fairfax media.
LNG has a proprietary and patented OSMR technology which the company says allows it to develop LNG projects at a fraction of the cost of more normal LNG projects. The 8mtpa Magnolia project is estimated to cost around US$2.2 billion. Woodside's 4.3 mtpa Pluto facility cost an estimated $15 billion.
But LNG has yet to prove its OSMR technology can be successfully ramped up to be commercially viable – when producing millions of tonnes of LNG each year. That is still a key test of the company's technology, and one reason why LNG is still a speculative play.
