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The planned $18-billion terminal in Kitimat, B.C., is being built by LNG Canada, the Royal Dutch Shell PLC-led consortium.Julie Gordon/Reuters

The National Energy Board has ruled that the $6.2-billion Coastal GasLink project falls under provincial jurisdiction, saying the natural-gas pipeline would be transporting natural gas within British Columbia.

Mike Sawyer, a prominent B.C. environmentalist, applied one year ago for a federal review of TC Energy Corp.’s Coastal GasLink pipeline plans. He said the project, approved by the BC Environmental Assessment Office in 2014, should have undergone a review by the NEB.

In his submissions to the NEB, Mr. Sawyer argued that while Coastal GasLink would be built within B.C., the pipeline would be “functionally integrated” with TC Energy’s Nova Gas Transmission Ltd. (NGTL) system in Alberta and northeast B.C.

But the federal regulator sided with Coastal GasLink in a ruling issued late on Friday.

“The project does not form a part of the Nova Gas Transmission Ltd. system, and is not vital or integral to it (NGTL), or any other federally regulated pipeline,” the NEB said. “Based on the evidence presented, the NEB found that the Coastal GasLink pipeline project is properly regulated by the province of British Columbia.”

In early 2019, Coastal GasLink started clearing land to make room for work camps along the 670-kilometre route from northeast B.C. to a West Coast export terminal, which has been under construction since the fall of 2018. The planned $18-billion terminal in Kitimat, B.C., is being built by LNG Canada, the Royal Dutch Shell PLC-led consortium.

TC Energy hopes to have Coastal GasLink in service by the end of 2023 to start a series of tests, while LNG Canada wants to begin exporting liquefied natural gas to Asia by early 2025.

“The NEB’s hearing involved 13 active participants,” the federal regulator said in its statement on Friday. “The process included the filing of evidence, and both written and oral argument, specifically related to whether the project forms part of a federal work or undertaking.”

While all 20 elected First Nation councils along the route support Coastal GasLink, critics include seven Wet’suwet’en Nation hereditary house chiefs who have led a campaign to oppose the project.

Coastal GasLink has said that even if its project were to be eventually connected to B.C. lines leading to Alberta, the main purpose of the B.C. pipeline remains transporting natural gas from northeast B.C. to Kitimat.

The venture has been primarily regulated by the B.C. Oil and Gas Commission.

Sander Duncanson, a lawyer representing Coastal GasLink (CGL), has warned that a time-consuming federal review would jeopardize construction plans. “Hundreds of millions of dollars have already been spent on the CGL pipeline alone," he told the NEB. “Significant regional, provincial and national benefits would be put at risk if work on the project were to be interrupted or suspended.”

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