Feds are going to need to get an equity position and lead the way if they want LNG on the east side to Europe, I’d think.
New large LNG projects (3-4 MTPA) in Canada will need a capital investment of $CD 40 - 50 billion (LNG terminal plus pipeline). That represents about a third to a half of the value of our largest energy infrastructure companies (ENB and TCE) who transact using a cost of service model (i.e.; they want others to take the risk on capital).
Putting capital at risk is nothing new for Canada’s oil and gas producers. But they do not have the collective size to put together $CD 40 - 50 billion. Rather than have our Governments make up the difference with subsidies (like we see happening with green energy on the east coast) which is not fair to taxpayers, my view is that there is a role - at least initially - for Governments to make equity investments in very large capital projects.
It also should happen ASAP if that’s the plan. The market is looking dubiously supplied in the short term- medium term and I wonder how many more of these are needed globally for supply over the next 100-200 years.
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