CALGARY -- A proposed $1-billion pipeline to move depressurized liquefied natural gas (LNG) from Kitimat could provide another gas source for Alberta oilsands producers when it comes online in 2009.Given that it takes 500 ft3 for a barrel of tar sands bitumen, that means this LNG terminal - if it all goes to Athabasca - has enough potential to fuel 2 million barrels per day of production. That means that if the tar sands producers can reduce their gas usage by 50% - a realistic mid-term estimate - this single LNG facility could power the 4 million barrels per day that is the estimate by 2025.
Calgary-based Kitimat LNG on Monday formed a partnership with B.C utility Pacific Northern Gas to build and operate the line, which will have initial capacity of one billion cubic feet per day.
The question is where the LNG is actually going to come from. The Russian exports on the Pacific are all marked for the Japanese and the Chinese, and Gulf natural gas is an awfully long way away. I suppose they must have a supplier in mind - Qatar, Id wager - but the Gulf isn't exactly stable territory these days.