An offshore oil rig support vessel leaves the harbour in St. John’s. The province is hoping to attract investment for potential reserves of natural gas off the shore of St. John’s.Greg Locke/Reuters
Massive potential reserves of natural gas off the shore of St. John’s could be worth roughly US$400-billion on the European market, the province says, as it works to develop a new royalty regime for the fuel to attract investment.
The province’s latest study of offshore resource basins, released Monday, concluded there are natural gas reserves of between 19.8 trillion and 35.4 trillion cubic feet, with a best estimate of 27.6 trillion. By comparison, Canada’s first offshore natural gas project was the Sable project in Nova Scotia. It produced two trillion cubic feet over roughly 20 years ending in 2019.
London-based Crown LNG pitches export project for Newfoundland and Labrador
Newfoundland and Labrador’s proximity to markets, access to ports and regulatory framework make it a prime potential global supplier of the fuel, the province’s Energy and Mines Minister Lloyd Parrott told media at a press conference.
That’s particularly true of Europe, he said, which is feeling the pinch of the energy crunch caused by the Iran war and the closure of the Strait of Hormuz.
“Newfoundland and Labrador represents the gateway to the north, and natural gas represents a whole lot of options that I don’t think we looked at in the past,” he said.
Momentum from the industry and governments has Canada’s natural gas sector keen to dust off some of the old engineering studies for liquefied natural gas projects. Not only is global demand for the fuel continuing to grow, but Canada has finally entered the export market in a substantial way with the startup of the LNG Canada export terminal in Kitimat, B.C.
The N.L. government study evaluated 39 prospective development areas in the Jeanne d’Arc Basin, a mature producing region roughly 350 kilometres east of St. John’s. The sites are all in relatively shallow water (less than 130 metres deep) and within a 50-km radius of each other.
A large portion of the area is outside existing licenses, which would make it available to companies that don’t yet have a foothold in the province’s offshore sector.
Canada’s second chance in the global LNG race
The province has Ottawa’s support in its goal to tap its natural gas resources as part of Canada’s broader energy development strategy, Mr. Parrott said.
“I think that the federal government would love to see natural gas coming from both the East and the West Coast.”
Newfoundland and Labrador is one of the largest provincial exporters of Canadian oil to non-U.S. markets, sending roughly 69 per cent of its total exports to Europe in 2025. It has four offshore oil-producing projects, all in the Jeanne d’Arc Basin – Hibernia, Hebron, Terra Nova and White Rose.
Monday’s study identified three areas of particular interest for stand-alone natural gas development, all relatively close to established oil sites: Ballicatters, roughly 21 km east of the Hibernia Field; Northeastern Jeanne d’Arc, approximately 18 km northwest of the White Rose asset; and Northern Jeanne d’Arc, about 20 km northeast of the Hibernia Field.
Together, the 27.6 trillion cubic feet would be worth around US$400-billion, based on the current European benchmark natural gas price, called Dutch Title Transfer Facility, said Craig Martin, deputy minister of energy and mines.
The province’s next step is a feasibility and investment opportunity study to evaluate the technical and economic viability of various development options for the gas.
That may include bringing natural gas to shore to liquefy it, a secondary processing opportunity that Mr. Parrott said he supports.
“Newfoundland and Labrador needs to seize every single opportunity that it can, whether it’s with our offshore or mining resources,” he said.
“If we’re going to make this a better place for all of us, part of that includes industry sector processing and the ability to get long-term sustainable jobs where people want to live here, and not just fly in, fly out.”
The province will also start consultations on a new natural gas regulatory regime with stakeholders and industry in the coming weeks, Mr. Parrott said. He hopes to have the rules finalized this fall.
Mr. Parrott declined to comment on whether the province would throw a fiscal bone to companies interested in developing the gas reserves, but said the province’s $90-million Offshore Exploration Fund, would be available to encourage new oil and gas exploration activities. The three-year fund was announced in the 2026 budget.
Charlene Johnson, the chief executive of industry group Energy NL, said she was pleased that the province is prioritizing natural gas opportunities.
“Advancing the identification of resources in the Jeanne d’Arc Basin, along with consultation on the development of an offshore natural gas royalty framework, marks an important step toward unlocking this potential,” she said in a statement.
