Canada’s aspirations to become a global liquefied natural gas (LNG) powerhouse from its Atlantic coast are hitting a costly roadblock. Rising project expenses and fierce competition from Qatar and the United States are eroding the business case for Canada’s LNG ambitions. As the global energy market shifts, Canada’s current oil and gas export landscape underscores both its potential and the challenges it faces in carving out a larger LNG footprint.
One key issue is that the Canadian government’s hatred for oil and natural gas has cost it an enormous opportunity to fund its “Energy Transition” and all of its other social programs while lowering emissions worldwide.
Canada’s Oil and Gas Exports: A Strong Base, But LNG Lags
Canada is a major player in global energy markets, ranking as the world’s fourth-largest oil producer and fifth-largest natural gas producer. In 2024, Canada exported approximately 3.7 million barrels per day (bpd) of crude oil, with 96% of these exports destined for the United States, primarily through pipelines like Enbridge’s Line 5 and the Trans Mountain Expansion. Natural gas exports, meanwhile, averaged around 8.1 billion cubic feet per day (Bcf/d), again predominantly to the U.S. via pipelines such as TC Energy’s NGTL system. These figures highlight Canada’s entrenched role as a reliable energy supplier, particularly to its southern neighbor.
However, Canada’s LNG exports remain negligible. The country’s only operational LNG export facility, LNG Canada in Kitimat, British Columbia, is still ramping up, with first shipments expected in mid-2025. Atlantic Canada, despite its strategic proximity to European markets, has no operational LNG export terminals. Proposed projects like Pieridae Energy’s Goldboro LNG and Repsol’s Saint John LNG have faced delays, cancellations, or cost escalations, leaving the region’s LNG dreams unfulfilled. Rising construction costs, regulatory hurdles, and global market dynamics are now making these projects pricier than ever.
Why Are Costs Climbing?
Several factors are driving up the price tag for Atlantic Canada’s LNG projects. First, global supply chain disruptions and labor shortages have increased the cost of materials and skilled workers needed for LNG infrastructure. For instance, the cost of steel, a critical component for LNG terminals, has risen by 20-30% since 2021 due to global demand and production constraints. Second, stricter environmental regulations and Indigenous consultation requirements in Canada add time and expense to project timelines. Unlike Qatar or the U.S., where regulatory frameworks are often more streamlined, Canadian projects face prolonged approval processes.
Third, financing is becoming tougher. Investors are wary of long-term LNG projects as the global energy transition accelerates. With Europe, a key target market for Atlantic LNG, aiming for net-zero emissions by 2050, the window for locking in long-term LNG contracts is narrowing. These challenges compound the already high capital costs of LNG facilities, which can exceed $10 billion for a single terminal.
Qatar’s Dominance: A Formidable Rival
Qatar, the world’s largest LNG exporter, is significantly undermining Canada’s Atlantic LNG prospects. In 2024, Qatar exported approximately 80 million tonnes per annum (MTPA) of LNG, accounting for roughly 20% of global supply. Its North Field Expansion project, set to increase output to 126 MTPA by 2027, ensures Qatar’s dominance for decades. Qatar’s advantages include low production costs (around $0.50/MMBtu), existing infrastructure, and long-term contracts with Asian and European buyers.
For Canada, Qatar’s economies of scale and established market presence make it nearly impossible to compete on price. European buyers, initially eager for non-Russian gas post-2022, are now locked into Qatari contracts, reducing demand for new Atlantic Canadian LNG. Qatar’s ability to deliver LNG at $10-12/MMBtu undercuts Canada’s projected delivery costs of $14-16/MMBtu, factoring in higher production and shipping expenses from Atlantic terminals. This price differential erodes Canada’s business case, especially for price-sensitive markets like Asia.
The U.S. Juggernaut: Proximity and Scale
The United States, Canada’s closest competitor geographically and economically, is another major obstacle. In 2024, the U.S. became the world’s top LNG exporter, shipping 91 MTPA from facilities like Cheniere’s Sabine Pass and Freeport LNG. With over 50 MTPA of additional capacity under construction, the U.S. is poised to maintain its lead. Its Gulf Coast terminals benefit from proximity to Atlantic shipping routes, lower labor costs than Canada, and a deregulated energy market that accelerates project timelines.
The U.S. has captured much of the European market that Canada’s Atlantic LNG projects targeted. Since Russia’s invasion of Ukraine, U.S. LNG exports to Europe surged, accounting for 47% of EU LNG imports in 2024. The U.S. also benefits from flexible contract terms, such as destination-flexible cargoes, which appeal to buyers wary of long-term commitments. Canada, by contrast, struggles to offer similar flexibility due to higher project risks and financing constraints.
Moreover, the U.S. is Canada’s primary market for pipeline gas. As U.S. LNG exports grow, Canada’s gas exports to the U.S.—which feed American LNG terminals—are indirectly supporting U.S. market share at Canada’s expense. This dynamic limits Canada’s ability to redirect gas to its own LNG projects without disrupting existing trade flows.
The Eroding Business Opportunity
The combined effect of Qatar’s low-cost dominance and U.S. market saturation has significantly narrowed Canada’s Atlantic LNG window. Five years ago, projects like Goldboro LNG were pitched as vital to meeting Europe’s gas needs. Today, Europe’s LNG import capacity is nearing saturation, with terminals in Germany, Netherlands, and France already operational. By 2030, global LNG supply is projected to exceed demand by 100 MTPA, creating a buyer’s market where only the lowest-cost producers thrive.
Canada’s Atlantic projects are particularly vulnerable. Their greenfield nature—requiring entirely new infrastructure—makes them costlier than U.S. brownfield expansions or Qatar’s existing facilities. Additionally, shipping LNG from Atlantic Canada to Asia, a key growth market, takes 20-25 days via the Panama Canal, compared to 10-15 days from Qatar or the U.S. Gulf Coast. This logistical disadvantage further erodes competitiveness.
Can Canada Pivot?
Despite the challenges, Canada’s Atlantic LNG dreams aren’t dead—but they need a strategic overhaul. One option is to focus on smaller, modular LNG facilities that require less capital and can be scaled incrementally. Another is to target niche markets, such as LNG for marine bunkering or off-grid communities in the Arctic, where Canada’s proximity offers an edge. Leveraging carbon capture and storage (CCS) could also make Canadian LNG more attractive to emissions-conscious buyers, though CCS adds upfront costs.
Government support will be critical. Streamlining regulations, offering tax incentives, or co-investing in infrastructure could bridge the cost gap. However, Canada must act quickly. With Qatar and the U.S. locking in contracts through the 2030s, the window for Atlantic LNG is closing.
Conclusion
Canada’s Atlantic LNG ambitions are growing pricier and riskier in a market dominated by Qatar’s cost advantages and U.S. scale. While Canada’s oil and gas exports remain robust—3.7 million bpd of oil and 8.1 Bcf/d of gas in 2024—its LNG sector is struggling to gain traction. To compete, Canada must navigate rising costs, regulatory complexity, and a global market tilting toward oversupply. The dream of Atlantic LNG isn’t over, but it’s a tougher sell than ever.
Energy News Beat will continue to monitor developments in Canada’s energy sector. Stay tuned for updates.
Notes on Sources and Assumptions
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Export Data: Canada’s oil (3.7 million bpd) and gas (8.1 Bcf/d) export figures are based on 2024 estimates from the Canada Energy Regulator and U.S. Energy Information Administration (EIA). These are conservative averages, as daily exports fluctuate.
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Qatar’s LNG Exports: The 80 MTPA figure for 2024 and North Field Expansion plans are sourced from industry reports and QatarEnergy announcements. Cost estimates ($0.50/MMBtu) reflect Qatar’s low breakeven costs.
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U.S. LNG Exports: The 91 MTPA figure and 47% EU market share are drawn from EIA and BloombergNEF data for 2024.
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Cost Increases: Steel cost increases (20-30%) and LNG project cost estimates ($10 billion+) are based on global construction trends and historical data for Canadian LNG projects like LNG Canada.
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Competitive Dynamics: Price differentials ($10-12/MMBtu for Qatar/U.S. vs. $14-16/MMBtu for Canada) are estimated based on production, shipping, and regasification costs from industry analyses.
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No Specific Cost Data for Atlantic LNG: The article assumes cost increases based on general trends (supply chain, labor, regulation) since no recent, specific data on Goldboro or Saint John LNG cost escalations was provided.
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