Article content continued

She added that LNG Canada will likely need an answer from Ottawa on relaxing the import tariffs by May as the project’s owners decide whether or not to invest.

“If we don’t have clarity on it, then we would be concerned that it would push the decision out or cancel the decision,” Pierce said.

While Shell’s LNG outlook did not specifically mention LNG Canada, Stream Asset Management chief market strategist Dan Tsubouchi said he believed the company gave out some big hints. “Boy, did they say a lot about it by the way they described how the supply gap is coming big time and that the independents can’t fill it,” he said.

Tsubouchi said the global LNG market is changing, shifting away from long-term, oil-price-linked contracts and shifting more of the risk from the buyer of LNG to the seller. He said this shift will make larger companies, like Shell, more likely to be the suppliers of the future than independent companies.

Tsubouchi said if you look back through Shell’s disclosure in recent months, “they’re clearly telling us that LNG Canada is investible and that LNG Canada is at the top of their list for LNG projects.”

He added that Shell was right when it predicted LNG markets would be in balance earlier than most financial analysts expected.

Shell noted that emissions-reduction policies in places like China accounted for a large uptick in LNG demand over the course of 2017.

The company’s outlook showed demand for the super-cooled natural gas grew by 29 million tonnes, or roughly 10 per cent, to 293 million tonnes last year as more economies try to transition away from coal-fired power generation and use cleaner-burning natural gas as a substitute.

Financial Post with a file from Reuters

gmorgan@nationalpost.com