A $4.8-billion pipeline by TransCanada Corp. faces a new obstacle after a prominent B.C. environmentalist applied for a federal review of it, a move that could disrupt Royal Dutch Shell PLC’s decision on whether to build a liquefied natural gas terminal in British Columbia.
Mike Sawyer, who scored a major legal victory last year against another gas project in the province, argues that TransCanada’s Coastal GasLink proposal, approved by the BC Environmental Assessment Office in 2014, should have undergone a review by the National Energy Board.
Constructing the pipeline is a key part of plans by Shell-led LNG Canada to invest up to $40-billion to export Western Canadian natural gas in liquid form to Asian markets. Shell and its four partners are expected to make a final investment decision by the end of 2018 on whether to build an LNG terminal in Kitimat, located at the head of Douglas Channel in northwest British Columbia.
Mr. Sawyer has a history of fighting LNG proposals and scored a key win a year ago when the Federal Court of Appeal ordered the NEB to consider arguments from him related to TransCanada’s Prince Rupert Gas Transmission (PRGT) route. Days after the court ruling, Malaysia’s state-owned Petronas decided to cancel its Pacific NorthWest LNG joint venture, which would have been fed with natural gas through PRGT.
In this instance, Mr. Sawyer wants the NEB to first conduct a hearing into whether the Coastal GasLink pipeline falls under federal instead of provincial jurisdiction. If it turns out that the case should be under federal purview, the second phase would be a full hearing by the NEB, potentially extending the regulatory process into 2020.
Coastal GasLink is designed to run 670 kilometres from northeast B.C. to LNG Canada’s site in Kitimat. TransCanada estimates more than 2,000 construction jobs could be created in relation to the pipeline.
The PRGT route would have gone nearly 900 kilometres from northeast B.C. to northwest B.C. — traditionally the turf of the BC Environmental Assessment Office, which cleared the way for the province to issue an environmental assessment certificate to PRGT in 2014. But Mr. Sawyer’s court challenge helped end it - and now he is trying a similar set of arguments to try to stop Coastal GasLink.
“The purpose of TransCanada’s proposed Coastal GasLink pipeline is to move natural gas from the WCSB [Western Canadian Sedimentary Basin] to international markets via LNG export from the coast of B.C. This is the same as the purpose of TransCanada’s proposed PRGT pipeline, as determined by the Federal Court of Appeal” in 2017, according to Mr. Sawyer’s application filed to the NEB.
Mr. Sawyer also argues that while Coastal GasLink would be built within B.C., the pipeline would be “functionally integrated” with TransCanada’s Nova Gas Transmission Ltd. system in Alberta and northeast B.C.
The NEB declined comment on Monday. A TransCanada spokeswoman said: “We are reviewing the application and will respond as appropriate through the National Energy Board.”
In May, the B.C. Environmental Assessment Office approved an amendment by TransCanada to alter its route to go south of Houston, B.C.
Protesters at the Unist’ot’en camp in northwest B.C. are also seeking to block Coastal GasLink, but TransCanada says the company has garnered support from 19 of 20 elected First Nation bands along the route.
Shell owns 40 per cent of LNG Canada while Petronas now holds a 25-per-cent stake after it recently joined the consortium in a deal first announced on May 31. The remaining partners are PetroChina (15 per cent), Japan’s Mitsubishi Corp. (15 per cent) and South Korea’s Kogas (5 per cent).
Last week, Shell said it is continuing to evaluate the merits of LNG Canada. “We are expecting to take a go-no go decision on LNG Canada this year,” Royal Dutch Shell chief financial officer Jessica Uhl said during a conference call on Thursday. “We are taking a very disciplined approach and are being thorough in our evaluation of LNG Canada.”