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Natural gas producers applauded a landmark settlement between the British Columbia government and the Blueberry River First Nations that will give the Indigenous group significantly more sway over projects in the province’s resource-rich Montney region, as other First Nations made ready to unveil similar deals.

On Wednesday, B.C. Premier David Eby and Blueberry River Chief Judy Desjarlais announced what both called a “historic” agreement that, in addition to giving the band a formal role in natural gas projects on its territory, includes $287.5-million in funding. The deal also includes potential revenue sharing from natural gas projects in northeastern B.C., but the First Nation has not released details of those arrangements.

The agreement resolves a lengthy legal dispute that came to a head when the B.C. Supreme Court ruled in June, 2021 that the province had infringed on Blueberry River’s Treaty 8 rights, which reflect agreements struck in 1899. The ruling prompted the province’s energy regulator to impose an 18-month moratorium on new oil and gas development licences in the region.

The province is expected to announce a related deal on Friday with other Treaty 8 First Nations. This would extend the impact of Blueberry River’s court victory and mark a shift in how resource development takes place in B.C.’s northeast.

That other agreement will be between the province and four First Nations: Doig River, Fort Nelson, Halfway River and Saulteau, according to Fort Nelson First Nation Chief Sharleen Gale. Another two Treaty 8 nations, West Moberly and Prophet River, are expected to sign the deal at a later date.

The agreement to be unveiled Friday represents a new beginning, Ms. Gale said. “I have to commend this government for doing the right thing,” she added. “Instead of taking us to court, they reconciled.”

The yet-to-be-announced deal is expected to include a revenue-sharing agreement that would provide for participating First Nations to receive 10 per cent of oil and gas royalties from projects in the area, as well as a multimillion-dollar fund to pay for restoration of lands affected by industrial development.

Such a restoration fund is also a feature of the Blueberry River agreement announced on Wednesday. The deal calls for $200-million to be in place for that purpose by June, 2025.

At a signing ceremony for the Blueberry River deal, Ms. Desjarlais, the First Nation’s chief, called the agreement a significant step. “First Nations will be participants in all stages of development, she said. “Blueberry now has a say every step of the way.”

Prior to Wednesday’s announcement, energy industry executives feared a Blueberry River settlement could include caps on natural gas production. Instead, the agreement calls for significant reductions in land disturbances.

“We broadly believe that this development is positive for the oil and gas industry,” said analyst Patrick O’Rourke at ATB Capital Markets in Calgary. He added that the challenge for energy producers will be working with Indigenous groups to develop projects while reducing those projects’ environmental impacts.

Mr. O’Rouke said domestic gas producers with operations in Montney, such as Tourmaline Oil Corp. TOU-T, ARC Resources Ltd. ARX-T and Canadian Natural Resources Ltd. CNQ-T, have already shown they can successfully partner with Indigenous groups.

Calgary-based Tourmaline is one of the largest natural gas producers in northeastern B.C., with 4,400 wells. In a news release, Tourmaline chief executive Mike Rose said he is “pleased with this new framework for oil and gas development that will create significant prosperity for the people and the province, for Blueberry River First Nations and all the Treaty 8 First Nations of B.C., and for industry.”

Analysts have said the settlement opens the door to future expansion of the LNG Canada terminal in Kitimat, B.C., which will export liquefied natural gas to Asia. The project, whose construction is about 70 per cent complete, is owned by Shell PLC RYDAF, Malaysia-based Petronas and PetroChina Co. Ltd.

“It is our expectation that the necessary work can now proceed to ensure that the gas Petronas Canada delivers to the LNG Canada project is responsibly produced right here in B.C.,” Petronas Energy Canada Ltd. chief executive Izwan Ismail said in a news release.

The Montney region holds one of North America’s largest energy reserves, with about 449 trillion cubic feet of natural gas.

Pipeline operators in the Montney region, such as AltaGas Ltd. ALA-T, are expected to see shipments rise as the Blueberry River settlement triggers increased natural gas production. Other infrastructure operators in the region include Pembina Pipeline Corp. PPL-T, Keyera Corp. KEY-T, Enbridge Inc. ENB-T and TC Energy Inc. TRP-T, which is building the Coastal GasLink pipeline that links Montney producers to the LNG Canada terminal.

Tristan Goodman, chief executive of the Explorers and Producers Association of Canada, said in a news release that the Blueberry River agreement “provides much-needed clarity to move forward with natural gas development.”

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Tourmaline Oil Corp
Tourmaline Oil Corp
Arc Resources Ltd
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Shell Plc
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Pembina Pipeline Corp
Keyera Corp
Keyence Corp
Enbridge Inc

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