Buyers based in the Persian Gulf are now looking at Canada’s west coast as a place to secure liquefied natural gas, and on the surface that makes no sense at all. The Gulf sits on some of the largest gas reserves on the planet. These buyers don’t need Canadian gas because their own region is running short. They want it because of where their own gas has to travel before it reaches a customer.
Every Gulf Cargo Passes Through One Strait
Gas loaded in Qatar or the UAE has to transit the Strait of Hormuz to reach any customer by sea, full stop, there’s no alternate sea route around it. That’s a single chokepoint carrying a massive share of the world’s LNG trade, and it sits right next to a region that has never gone more than a few years without some kind of military or political flare-up. A cargo bound for Canada’s Pacific coast has no equivalent bottleneck between the loading dock and the customer in Asia. That’s the entire logic here, according to the president of Pacific Energy, the Singapore-based company that holds a 70% stake in the Woodfibre LNG project currently under construction on the BC coast. For a buyer trying to build a diversified supply portfolio, the value isn’t necessarily a lower unit price. It’s knowing the cargo actually arrives on schedule no matter what happens near a strait eight thousand kilometres away.
An Argument Western Canada Has Made for Years
None of this is a new pitch. Secure, non-Gulf gas supply has been the case western Canada has made to Asian buyers for well over a decade, through a string of proposed export terminals that got announced, studied, and then quietly died somewhere in the federal approvals process before a single cargo ever loaded. What’s different now is that one of those projects is actually under construction, with a Gulf-region buyer citing the exact chokepoint logic that Canadian LNG advocates have been repeating since long before Woodfibre broke ground. The argument didn’t change. What changed is that there’s finally a terminal far enough along to test it against.
Why This Is an Alberta Story, Not Just a BC One
The export terminal sits on the BC coast, but the gas doesn’t start there. The Montney basin that feeds it runs under northeast British Columbia and continues straight across the boundary into northwest Alberta, one continuous geological formation that doesn’t care where the provincial line gets drawn on a map. The drilling contractors, the frac crews, the pipeline welders, and the service shops working that formation are overwhelmingly Alberta companies running Alberta payrolls, even on wells that sit a few kilometres on the BC side of the border. A rig contract signed because a Gulf buyer wants secure supply out of Woodfibre still gets fulfilled by a crew based out of Grande Prairie, driving trucks that get serviced at a shop in Fort St. John or Fox Creek. The export terminal is BC’s address. A meaningful share of the drilling and servicing dollars behind it lands in Alberta regardless.
The Only Real Question Left
Demand for secure, non-Gulf LNG supply was never really in doubt. Any buyer paying attention to shipping risk around the Strait of Hormuz was always going to come looking for an alternative eventually, and Canada’s west coast, sitting closer to Asian markets than the US Gulf Coast and clear of the Middle East’s usual flashpoints, was always going to be on that shortlist. The open question for the better part of fifteen years was never whether the demand would show up. It was whether Canada would have the export capacity built and ready by the time it did. Woodfibre getting built, cargo by cargo, is the first real evidence that the answer might finally be yes.
Will Canada have enough LNG export capacity online to meet this demand before Gulf buyers lock in supply from someone else instead?
