Ksi Lisims LNG set to undergo B.C.-led environmental review

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The federal government is poised to assign British Columbia’s environmental regulator to lead a joint review into a liquefied natural gas project backed by the Nisga’a Nation.

At the request of the B.C. Environmental Assessment Office, Ksi Lisims LNG would go through the provincial-led evaluation under the federal Impact Assessment Act.

“This is a major milestone for us and is a big step toward building one of the most significant Indigenous-supported industrial developments in Canadian history,” Ksi Lisims spokeswoman Rebecca Scott said in a statement.

The Impact Assessment Agency of Canada has accepted the proponent’s 680-page document, called the “detailed project description,” for further examination. The review process could last until late 2024.

“The agency has decided that an impact assessment under the IAA is required,” the federal regulator said in its notice dated March 27. The Impact Assessment Act replaced the Canadian Environmental Assessment Act in 2019, with the revised regulatory process designed to pay greater scrutiny to the climate consequences of industrial proposals.

A federal decision on designating the B.C. regulator as the lead partner is expected as early as Thursday. A decade ago, B.C. and Ottawa agreed to a collaborative regulatory process called “substitution,” aimed at reducing unnecessary duplication in scrutinizing applications from energy proponents.

Ksi Lisims would include investments in floating LNG facilities on the West Coast, an 850-kilometre pipeline route and drilling in northeast B.C.

Last month, the B.C. government introduced new environmental standards for LNG projects in a bid to spur net-zero emissions of greenhouse gases by 2030.

“The Ksi Lisims LNG project establishes a new blueprint for net-zero LNG design, and we’re confident it will meet British Columbia’s high environmental standards,” Ms. Scott said.

But the Lax Kw’alaams band council is opposing Ksi Lisims, which would be Canada’s second-largest terminal for exporting LNG.

“The evidence is strong that proceeding with the project will induce B.C.’s failure to meet its climate targets,” the Lax Kw’alaams said in a March 3 letter to the B.C. regulator.

The Lax Kw’alaams and climate activists warn that the only LNG export terminal under construction in the country, LNG Canada’s Phase 1, will already make it difficult for B.C. and Canada to meet climate goals in 2025, when the Shell PLC-led project opens in Kitimat.

LNG Canada is considering a major expansion in Kitimat, with the option in Phase 2 to utilize natural gas-fired turbines initially for liquefaction and then subsequently switching over to electric power. “Advancing electrification can benefit northern and Indigenous communities,” Teresa Waddington, LNG Canada’s vice-president of corporate relations, said in a statement.

Federal Finance Minister Chrystia Freeland said she supports LNG Canada. “It’s important for our own growth and it is important for our allies, and we have the capacity to do even more than that,” Ms. Freeland told the Greater Vancouver Board of Trade last week.

The Nisga’a, Western LNG and a group of natural gas producers called Rockies LNG are partners in Ksi Lisims.

Eva Clayton, the elected president of the Nisga’a Lisims government, mentions the project’s “net-zero” design six times in a March 7 letter filed with the provincial regulator, saying BC Hydro would supply power for electric motors to drive compressors for liquefaction. “The Ksi Lisims project represents a generational opportunity for the Nisga’a Nation and B.C. to work together to achieve lasting reconciliation,” Ms. Clayton said.

Bookings to transport natural gas – known in the pipeline industry as “nominations” – are shaping up to be strong, according to Rockies. Birchcliff Energy Ltd. is the leading member of Rockies, but ARC Resources Ltd. has exited the group. “I am pleased to say that we have replaced ARC in both size and nominations,” Birchcliff chief executive Jeff Tonken said in an e-mail.

Rockies won a key round in a protracted legal dispute with Steelhead LNG last July, when a Federal Court judge made a ruling in favour of Rockies in the case of Steelhead alleging patent infringement of floating LNG facilities.

ARC is focusing its attention in Canada on a supply deal with the proposed Cedar LNG project in Kitimat. Cedar, co-owned by the Haisla Nation and Pembina Pipeline Corp., received environmental approval from the B.C. and federal governments last month.

The contentious Coastal GasLink pipeline, to be operated by TC Energy Corp., would transport natural gas from northeast B.C. to Kitimat. The pipeline project is already designed to have the capacity to handle LNG Canada’s potential Phase 2 and also Cedar, subject to adding more compressor stations along the route.

Coastal GasLink’s construction is about 85-per-cent completed

A group of Wet’suwet’en Nation hereditary chiefs has led a campaign to oppose Coastal GasLink, with 28 per cent of the route crossing the Wet’suwet’en’s unceded territory. Wet’suwet’en hereditary chiefs say they have jurisdiction over that territory.

Whatever new pipeline proposal is chosen by Ksi Lisims is also bound to be controversial since the route would cross the Gitxsan Nation’s unceded territory.

The Lax Kw’alaams are criticizing Enbridge Inc.’s proposal to construct the Westcoast Connector Gas Transmission pipeline project to supply Ksi Lisims. Westcoast Connector is one of two pipeline options being considered by Ksi Lisims. The other pipeline option is TC Energy’s proposed Prince Rupert Gas Transmission.

Aside from Ksi Lisims, Cedar and LNG Canada’s potential Phase 2, two other projects for exports using tankers remain active in B.C.: Woodfibre LNG and expansion plans at Tilbury LNG.

Industry attention has shifted back to B.C. after two East Coast LNG proponents said they have scrapped plans to transport Western natural gas to Atlantic Canada.

Repsol SA announced last month that it cancelled its plans to export from its Saint John LNG site in New Brunswick. Pieridae Energy Ltd. abandoned its proposal to export 10 million tonnes a year of LNG, opting instead for vastly scaled-down plans for its Goldboro LNG project in Nova Scotia.