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A rendering of Pacific NorthWest LNG’s proposed export terminal on Lelu Island, near Prince Rupert in northwestern British Columbia. (Pacific NorthWest LNG)
A rendering of Pacific NorthWest LNG’s proposed export terminal on Lelu Island, near Prince Rupert in northwestern British Columbia. (Pacific NorthWest LNG)

Federal review of Pacific NorthWest LNG project resumes Add to ...

The federal environmental regulator reviewing an LNG project headed by Malaysia’s state-owned Petronas has restarted its assessment after a seven-month delay.

On May 9, the Canadian Environmental Assessment Agency (CEAA) halted the regulatory clock at Day 167 of the one-year federal review process because it required more information from the Petronas-led Pacific NorthWest LNG project.

A CEAA spokeswoman said the regulatory clock is ticking again, advancing to Day 172 on Wednesday after Pacific NorthWest LNG submitted new information last Friday about its plans to export liquefied natural gas. But given the lengthy delay, the federal environmental review could stretch into mid-2015.

Provincial government officials had sought to play down a warning by Petronas chief executive officer Shamsul Azhar Abbas in September that Pacific NorthWest LNG faced being cancelled in part due to regulatory delays, according to records released to The Globe and Mail after a freedom of information request to the B.C. Ministry of Natural Gas Development.

Mr. Shamsul had threatened to cancel the massive venture, setting off a flurry of e-mails among B.C. government officials as they scrambled to prepare a briefing note for Premier Christy Clark before her Sept. 30 meeting in Vancouver with the Petronas CEO.

“Rather than ensuring the development of the LNG industry through appropriate incentives and assurance of legal and fiscal stability, the Canadian landscape of LNG development is now one of uncertainty, delay and short vision,” Mr. Shamsul said in the Financial Times on Sept. 25.

After a flurry of government e-mails early that morning, Kursti Calder, the director of policy and decision support in the Ministry of Natural Gas Development, forwarded talking points to colleagues in the afternoon. One of the bullet points alluded to how the provincial regulator would be issuing a ruling before its federal counterpart: “Decision dates for the two respective processes are not closely aligned.”

Pacific NorthWest LNG wants to build an export terminal on Lelu Island, located near Prince Rupert. But the Petronas-led group decided in early December to indefinitely delay the final investment decision on whether to construct the $11.4-billion terminal, saying the consortium needs to find ways to reduce construction costs.

Greg Kist, then the president of Pacific NorthWest LNG, offered words of assurance in a Sept. 25 e-mail to Steve Carr, Natural Gas Development Deputy Minister.

“I certainly believe our working relationship has been good and we have been committed to getting this project over the finish line and the team here remains committed to that goal,” Mr. Kist wrote.

While the CEAA is the lead regulator on the case, the briefing note for the Premier emphasized co-operation between the federal agency and the B.C. Environmental Assessment Office.

The B.C. office approved Pacific NorthWest LNG in November, and two provincial cabinet ministers, Mary Polak and Rich Coleman, have issued a B.C. environmental assessment certificate for the project.

“The proposed project triggers both a provincial and federal Environmental Assessment, and co-ordinated assessments began in February, 2014, when the project filed its environmental assessment application,” according to the Ministry of Natural Gas Development’s briefing note for Ms. Clark. “A streamlined Environmental Assessment process has been established in co-operation with the federal government. Pacific NorthWest LNG is currently taking advantage of this ‘co-ordinated’ assessment process.”

Pacific NorthWest LNG is viewed by analysts as the most promising among 18 proposals to export LNG from the West Coast to energy-thirsty customers in Asia.

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