After years of struggling to secure access to tidewater for its products, the Canadian oil and gas industry see hope in the conditional approve of a liquefied natural gas (LNG) project for northern British Columbia.

The federal government granted approval, with 190 conditions, in September for an $11.4-billion terminal to export LNG from northern B.C. If the consortium backing the Pacific NorthWest LNG project, led by Malaysia’s Petronas, can meet the conditions, it would be a relief for an industry that has experienced intense pressure amid low oil and gas prices.

Canadian heavy oil remains locked in North America, however, for at least the next few years. TransCanada’s Keystone XL pipeline was vetoed in the United States by President Barack Obama, while the National Energy Board (NEB) is not expected to issue its recommendations on the company’s Energy East project until 2018. The proposed Northern Gateway has been shelved by Enbridge.

The federal Cabinet is expected to deliver a decision on Kinder Morgan’s planned expansion of the Trans Mountain pipeline by the end of this year. Considerable uncertainty persists over whether Canada’s heavy oil can reach overseas markets.

Signs suggest the industry could enjoy substantial success exporting liquefied petroleum gas (LPG) products – specifically propane. A byproduct of natural gas extraction and crude oil refining, an average of 6.0 million cubic metres of Canadian propane is exported annually to the U.S. Meanwhile, Canada produces roughly 9.5 million cubic metres of propane, consuming more than 1.1 million cubic metres domestically for heating and industrial purposes, such as the production of propylene and other plastics.

If B.C. is to realize the LNG boom many have predicted for that province, then this propane glut will only rise.

To address this, two projects have been proposed to begin exporting large quantities of Canadian propane to the Asia-Pacific region. First, Calgary-based AltaGas has partnered with Japan’s Idemitsu Kosan on the Ridley Island Propane Export Terminal. It would export the equivalent of 2.1 million cubic metres of propane annually from a location near Prince Rupert, B.C., as early as 2018.

Astomos Energy – a partnership between the LPG divisions of Mitsubishi and Idemitsu Kosan – has signed an off-take agreement for half the propane exported from this terminal and the proponents are seeking buyers for the remaining half.

Meanwhile, Calgary-based Petrogas filed an application in March 2016 with the NEB for a 25-year export licence. It is seeking to export more than 5.0 million cubic metres worth of propane, most likely shipping the product by rail from Fort Saskatchewan, Alta., to a terminal facility in Ferndale, Wash. It is unclear which specific buyers Petrogas has in mind or how quickly off-take agreements can be secured, should the NEB approve the export licence application.

There should be no shortage of buyers. The manufacturing sector in the Asia-Pacific region has an enormous appetite for propane and butane, another LPG commodity. According to the most recent estimates, the shortfall between what Asia can supply and its LPG demand will reach a new record of 1.5 million barrels per day (mbpd) in 2017.

Given the proximity of Canada’s West Coast to the destination market in comparison to Middle East suppliers like Saudi Aramco, major propane importers like Japan’s Eneos Globe Corp, South Korea’s E1, and China’s Unipec might soon follow Astomos Energy by securing their own off-take agreements for Canadian propane.

These importers have had to rely entirely on increased exports from the U.S., with that country nearly tripling its LPG exports to Asia between 2014 and 2015. Just as Canada has become increasingly wary of depending on only one market for its energy products, the Asia-Pacific region has also become wary of depending on only one source.

Given the rich potential to create jobs and secure relief for a beleaguered sector of the Canadian economy, western Canadian provinces should adopt policies which can encourage the further development of the region’s plentiful LPG resources. The Petrochemicals Diversification Program announced by the Alberta government in February is one such example of this. It offers up to $500 million in incentives through royalty credits for companies interested in the development of petrochemical facilities in that province.

The program received a reported 16 applications, and a renewal of the program would doubtless receive even more responses from local and international players eager to help deliver on Western Canada’s LPG promise.

Paul Pryce is a frequent writer on public policy and economic trends in western Canada