Q: Hi 5i,
A question regarding TOU:
I've reviewed its website - very impressive and informative by the way! - and can't find any indication that TOU intends to send gas to the Canadian west coast for export as LNG. All gas it markets for LNG export seems to go through the US to the east coast or the Gulf.
I'm wondering if I understand this correctly and, if so, why wouldn't TOU take advantage of west coast LNG facilities in Canada and is it missing out by not doing so? (I know the TOU management is very smart so if they don't send gas to our west coast there's no doubt good reason - but I don't know what it might be ...).
Thanks for any insight you're able to provide.
Peter
A question regarding TOU:
I've reviewed its website - very impressive and informative by the way! - and can't find any indication that TOU intends to send gas to the Canadian west coast for export as LNG. All gas it markets for LNG export seems to go through the US to the east coast or the Gulf.
I'm wondering if I understand this correctly and, if so, why wouldn't TOU take advantage of west coast LNG facilities in Canada and is it missing out by not doing so? (I know the TOU management is very smart so if they don't send gas to our west coast there's no doubt good reason - but I don't know what it might be ...).
Thanks for any insight you're able to provide.
Peter
5i Research Answer:
It is likely due to transportation constraints. While a direct route would be of course nice, it is not always possible for producders. Pipeline tie-ins can be expensive, and it often is simply more profitable to use current existing facilities for transport. Despite this, any LNG development should provide underlying support to all gas prices in Canada, so TOU can still benefit indirectly.