LNG export facility not proceeding

Petronas’ decision impacted TransCanada’s Prince Rupert Gas Transmission project

  • Aug. 2, 2017 1:30 a.m.

A decision made by Petronas and its partners not to proceed with the Pacific NorthWest LNG project, a proposed natural gas export facility near Port Edward, B.C., will impact Lake Babine Nation.

Last week the Malaysian state-controlled energy giant pulled the plug on the proposed $11.4-billion export facility, which would have shipped 19 million tonnes a year of liquefied gas to markets in Asia while pumping five million tonnes of carbon dioxide annually into the atmosphere.

The company made this decision after a review of the project amid changes in market conditions.

“We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry has led us to this decision.” said Anuar Taib, Petronas’ CEO.

Petronas’ decision impacted TransCanada’s Prince Rupert Gas Transmission project (PRGT), a proposed 900-km pipeline that would deliver natural gas from northeastern B.C. to the Pacific NorthWest LNG facility. TransCanada released a statement last week saying that the company is now “reviewing their options.”

“As part of our agreement with Petronas, following receipt of a termination notice, TransCanada would be reimbursed for the full costs and carrying charges incurred to advance the PRGT project; we expect to receive this payment later in 2017,” stated TransCanada. “We continue to focus on our significant investments in new and existing natural gas infrastructure to meet our customers’ needs.”

Lake Babine Nation (LBN) was one of 17 First Nations along the PRGT route that had signed pipeline benefits agreements with the province for this pipeline. LBN Chief Wilf Adam said he wasn’t entirely surprised at the recent announcement.

“It was a very tough process and divided our community,” he said. “I wish it was done right from the beginning as it was the wrong location for a terminal.”

“We negotiated hard all around but brought much needed experience for next time,” he added. “It will make us more prepared to move forward in a positive way.”

Skeena-Bulkley Valley MP Nathan Cullen said Petronas’ announcement reflects both changing market conditions and the project’s inability to gain the support of local and broader communities.

“The northwest will always welcome well designed and locally supported projects that respect First Nations rights and title, provide local jobs, and are economically and environmentally stable,” Cullen said. “Unfortunately, from the very beginning, Petronas just wasn’t able to offer these elements and gain the social license the project needed to proceed and succeed.”

Cullen added that risks posed by the proposed Petronas terminal to irreplaceable salmon habitat and eelgrass beds may have been the single greatest factor driving opposition to the project.

Val Litwin, President and CEO of the B.C. Chamber of Commerce, said the decision not to proceed with the Pacific NorthWest LNG terminal is a loss for B.C. However, she says there’s still a window of opportunity to build a world-leading LNG industry in Canada.

“An LNG industry would not only help to secure a strong economic future of our province, but it would also provide a boost to the Canadian economy as we look to export clean energy to global markets,” she said.

– With files from Joseph Jack

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