Four more proposed liquefied natural gas projects in British Columbia have received approvals for export licences from the National Energy Board, but the federal cabinet still needs to give its blessing.
The NEB has approved the applications from three major proponents seeking to build terminals in northwestern British Columbia: BG Group’s Prince Rupert LNG Exports Ltd., the Petronas-led Pacific NorthWest LNG Ltd. and Exxon Mobil Corp.’s West Coast Canada LNG Ltd.
A smaller venture called Woodfibre LNG Export, planned for the Squamish area north of Vancouver, also received licence approval.
While Rich Coleman, B.C. Minister of Natural Gas Development, welcomed the regulatory approvals as a “major milestone,” federal Natural Resources Minister Joe Oliver said Ottawa will review the NEB decisions.
“Our government will only allow energy projects to proceed if they are found to be safe for Canadians after an independent, science-based environmental and regulatory review,” Mr. Oliver said in a statement, adding that the NEB decisions still await final approval from the federal cabinet.
The NEB has now granted export licences for seven fledgling B.C. LNG projects and is reviewing applications from another four. None of the approved projects, however, are in the terminal construction stage because the proponents say they first need to learn details of the B.C. government’s plans for taxation of the LNG industry and internal assessments still must be conducted on the economics of proceeding.
Natural gas production techniques have improved over the years, including in the Montney gas play in northeastern British Columbia.
Late Monday, industry analysts said the export licence approvals mean those firms pushing for Canada to join the global natural gas market have cleared a key hurdle.
“This is a very quick turnaround, and it represents a huge Santa Claus present for the four operators,” said Bill Gwozd, a senior vice-president at Ziff Energy.
“Now they can actually go back to their markets, and tell them, ‘Hey, we’re serious,’” said Mr. Gwozd, whose Calgary firm is contracted by LNG exporters to do long-term natural gas supply reports that accompany each NEB application.
Although there is always competition in energy markets, he said increasing global natural gas demand – especially in Asia – is going to mean a number of markets for Canadian gas.
The NEB previously gave the green light on export licences to the Shell Canada Ltd.-led LNG Canada project, the Kitimat LNG proposal by the Canadian units of Apache Corp. and Chevron Corp., as well as a smaller plan touted by B.C. LNG Export Co-operative LLC, which is backed by the Haisla First Nation. The Kitimat LNG and BC LNG Export Co-operative proposals each received 20-year licences while the other five each won export approvals for 25 years.
“The Canadian gas industry is seeking to access overseas gas markets through exports of LNG,” the NEB said Monday. “When evaluating LNG export licence applications, the board considers if the quantity of gas proposed to be exported is surplus to Canadian requirements, taking into account trends in the discovery of gas in Canada. Each application is assessed on its own merits. The board determined that the quantity of gas proposed to be exported for each application will be surplus to Canadian requirements.”
The Canadian Association of Petroleum Producers said the licence approvals are good news for Canada.
“It’s both a recognition of the opportunity for us. And then also I think Canadians and British Columbians should feel secure that the NEB is only granting the export licences because there is an ample resource to serve domestic and emerging international markets,” said Geoff Morrison, manager of B.C. operations for CAPP.