Tourmaline Oil Corp. joins new Canadian LNG project

Kevin Orland, Bloomberg August 04, 2023

(Bloomberg) – A proposed liquefied natural gas export terminal on Canada’s Pacific Coast is getting a major boost as Tourmaline Oil Corp. — the country’s largest natural gas producer — agreed to join the project.

Tourmaline said late on Wednesday that it’s joining Rockies LNG, a group of producers working on the 12 million-metric-ton-per-year Ksi Lisims project on the northern edge of British Columbia’s Pacific coast. Rockies LNG’s members produce a combined 5.6 Bcfd, about a third of the country’s output. The Nisga’a Nation indigenous group and Texas-based Western LNG also are involved.

Canadian gas drillers have often suffered from low prices because of constrained export options, and Tourmaline has been a leader in devising new routes to market its output. The company earlier this year began selling the first significant amount of Canadian gas contracted for markets beyond North America.

“We are the largest gas producer and a low-cost potential supplier, and we’re investment grade,” Tourmaline Chief Executive Officer Michael Rose said of his company’s contribution to the Ksi Lisims project on a call with analysts on Thursday. “We’re excited, and we’re going to do everything we can to drive that project to fruition.”

Canada’s Montney shale formation — stretching from Alberta into British Columbia — is one of the largest gas resources in North America, with the potential to produce almost 450 Tcf of gas. Tourmaline produced the equivalent of about 495,900 boed in the second quarter, a figure that was reduced by about 3% because of fires in the area.

The Shell Plc-led LNG Canada project, also in British Columbia, is on track to begin shipping cargoes by the middle of the decade. The plant is estimated to cost C$40 billion ($30 billion), and its first phase is expected to produce about 14 million metric tons a year.

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