I wrote last week about U.S. liquefied natural gas (LNG) projects. And how falling gas prices in markets like Asia may make them more difficult to develop.

Another headwind to Gulf Coast exports is global competition. Especially from the Pacific coast of Canada.

News last week ramped up that competition a little more. With one high-profile developer in the latter region taking "a great step forward" in realizing exports from the burgeoning Canadian sector.

That's Royal Dutch Shell. Leader of the "LNG Canada" consortium that's seeking to develop an LNG export project at Kitimat, British Columbia. In concert with heavyweight partners PetroChina, Korea Gas, and Mitsubishi.

The consortium announced that it has selected a contractor for construction of the proposed $10 billion liquefaction terminal here. With a group led by Japan's Chiyoda Corp--and also including Foster Wheeler, Saipem, and WorleyParsons--getting the nod.

The news is a bit of a surprise. Given that the LNG Canada project hasn't yet had final investment approval from its developers. Like almost all of the proposed LNG projects in British Columbia, the backers have been waiting for more specifics on the provincial tax regime here. With such details being expected from the government this fall.

But the contractor award shows that the LNG Canada project is moving forward nonetheless. Signalling that Shell and its partners are serious about realizing Pacific exports.

The enthusiasm is warranted. LNG exports from western Canada are projected to be cheaper than U.S. Gulf Coast shipments by a few dollars per mmbtu of gas. And those savings could give projects here a leg up in the race to sell cheap North American gas into Asian markets.

Such cost benefits are a big part of the reason why total investment slated for British Columbia LNG is shaping up in the hundreds of billions of dollars. Potentially making this the biggest centre for energy development on the planet.

We'll see if projects like LNG Canada's do indeed get the green light over the coming months.

Here's to the left coast,

By Dave Forest