As part of Ottawa’s efforts to reduce dependency on the United States, Canada approved a multibillion-dollar extension of a west coast natural gas pipeline on Friday, claiming it will increase shipments to Asia.
Canada is “an energy superpower,” according to Prime Minister Mark Carney, who also stated that selling more gas and oil to Asia can help offset losses from deteriorating trade relations with the US.
The project “supports Canada’s trade diversification strategy through enhanced ability to meet natural gas demand from Asian markets,” according to a statement from the country’s natural resources ministry.
But the pipeline could also ease liquified natural gas sales to the United States, adding another possible Canadian bargaining chip in upcoming negotiations with President Donald Trump on the future of the North American free trade agreement.
With a planned completion date of late 2028, work on the CAN$4 billion ($2.9 billion) expansion of a pipeline system operated by Canadian energy giant Enbridge in British Columbia is scheduled to start this summer.
The global LNG market, which is being strained by the US-Iran confrontation, won’t receive immediate assistance from those timelines.
However, the International Energy Agency issued a warning on Friday about the conflict’s longer-term effects on LNG supplies, which have caused energy prices to skyrocket since Tehran essentially blocked Gulf tanker traffic in the Strait of Hormuz.
With global supply chains shaken by the conflict, experts have said Canadian energy products — which do not require transit through the Middle East — could become increasingly attractive in Asian markets.
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