CALGARY _ A natural gas supply deal signed Wednesday between Russia and China includes some mind-bogglingly large numbers _ but not big enough to get British Columbia Premier Christy Clark worried about her province's future as a global energy exporter.
The value of the contract _ signed amid growing isolation of Russia by traditional customers in the West _ is pegged at $400 billion and covers a 30-year period. The Russian gas, expected to flow to China by pipeline as early as 2018, would represent about a quarter of China's current annual gas consumption.
``I've never said that B.C. would be the only supplier of natural gas to any country, but what I have said is that every country, every receiver of natural gas is going to want to have one reliable partner in their portfolio,'' Clark said at a conference in Vancouver.
``We've certainly seen the way that Russia likes to do business these days, and we certainly know that the Chinese want a dependability of supply. We can supply that.''
So far, seven export licences have been granted to proposed West Coast LNG projects, said federal Natural Resources Minister Greg Rickford.
``Canada's vast energy supplies represent an opportunity for countries looking to diversify their energy imports, especially in the Asia-Pacific,'' he said in an emailed statement.
The International Energy Agency predicts a quadrupling in Chinese gas demand by 2035, he noted.
Ed Kallio, director of gas consulting at Ziff Energy, said the Russian exports to China will be ``just a drop in the bucket'' when its future gas consumption is taken into account.
``It doesn't even come close. This doesn't even scratch the surface.''
Hal Kvisle, CEO of Calgary-based Talisman Energy Inc.(TSX: T.TLM,Stock Forum), agrees the deal shouldn't rattle Canada.
``It's not a quantity of gas that's going to swamp the market,'' he told reporters on a conference call.
``It certainly doesn't shut the door on LNG exports from Canada.''
Talisman has been active in Western Canadian shale gas, although it is looking to sell some properties and has no ambitions to invest in West Coast LNG export infrastructure. The company is also a big natural gas player in Southeast Asia, but Kvisle said it's a ``huge'' market that shouldn't be affected by the Russia-China deal.
Gordon Houlden, director of the University of Alberta's China Institute, said China's energy needs are ``massive'' and even though the country's economic growth rate has been slowing, it's still formidable.
China is heavily dependent on coal for power generation, but is keen to replace it with cleaner-burning natural gas, he added. The country also wants to make sure it has a steady source of supply, with the aim of buying from a wide array of different players.
``I agree the numbers are impressive. It's easy with Chinese numbers, though, to come up with impressive outcomes,'' said Houlden.
``It doesn't fundamentally change the equation. China wants diversity of supply. We represent that.''
There's voracious demand for LNG elsewhere in the region, with countries such as South Korea and Japan eager to get their hands on Canadian LNG supplies, Houlden added.
But that doesn't mean Canada should be complacent, he said.
``Time is of the essence. The faster we can move, the more nimble we can be as a country in terms of getting energy infrastructure built, the better our options will be and the greater benefit to the country.''
In some ways, Canada has an edge over its global LNG competitors, which also include Australia, Qatar and soon the United States, said Barry Munro of Ernst & Young.
Several companies from China, Japan, Korea and Malaysia have acquired interests in Western Canadian natural gas fields.
``By owning the underlying gas reserves, they can deal with some of the potential pricing pressures,'' he said.
However, there are some ``real concerns,'' Munro said, not the least of which is getting First Nations on side with the projects. Plus, Canada is at a very early stage in the game.
``It's a greenfield industry in Canada, so not only do you have to prove up the natural gas reserves, we're going to have to build all the pipelines and facilities.''
_ With files from James Keller in Vancouver and Julian Beltrame in Ottawa