Australian firm asks B.C. First Nation to support LNG project

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An Australian company is reaching out to the Lax Kw'alaams First Nation in hopes of winning support for plans to export liquefied natural gas from the aboriginal group's backyard in northern British Columbia.

Land located across the bay from the Lax Kw'alaams reserve is an ideal spot to build an export terminal, Perth-based Woodside Petroleum Ltd. says.

Woodside's Grassy Point LNG project is collecting comments from five aboriginal groups – the Lax Kw'alaams, Metlakatla, Gitxaala, Kitselas and Kitsumkalum.

The proponent is seeking approval from the B.C. Environmental Assessment Office to build the terminal on provincial Crown land at Grassy Point, 30 kilometres north of Prince Rupert.

The Lax Kw'alaams and Metlakatla say the land is part of their traditional aboriginal territory.

The company produced a 20-page document, titled Aboriginal Consultation Plan, that it filed this spring to the B.C. environmental regulator. Last year, Woodside received a 25-year LNG export licence from the National Energy Board.

The Australian energy giant said it will set aside extra time to meet with the Lax Kw'alaams and Metlakatla. "This is due to the province having made an initial assessment that Lax Kw'alaams Band and Metlakatla First Nation have strong aboriginal rights and title claims to the project area and that there could be serious project-related impacts on their asserted claims," Woodside said in its filing to the B.C. regulator.

Industry observers are watching in particular for reaction from the Lax Kw'alaams because the band council fought last year against Pacific NorthWest LNG's plans to build a terminal at Lelu Island, 15 kilometres south of Prince Rupert.

A group called the Allied Tsimshian Tribes of Lax Kw'alaams opposes Pacific NorthWest LNG. Critics say the Pacific NorthWest LNG project poses a risk to juvenile salmon habitat on Flora Bank, a sandy area located next to Lelu Island.

But a group of hereditary chiefs, under the banner of Nine Tribes of Lax Kw'alaams, is in favour of the project. And John Helin, who was elected as the new Mayor of Lax Kw'alaams last November, has given his conditional support to Pacific NorthWest LNG, subject to the creation of an environmental performance committee. Mr. Helin did not return calls for comment about Grassy Point LNG.

Tsimshian leaders of the Metlakatla, Gitxaala, Kitselas and Kitsumkalum say they are open to the idea of LNG exports from Lelu Island, but have not yet indicated their views on Grassy Point LNG.

Woodside is hoping the Lax Kw'alaams will be receptive to Grassy Point LNG, forecasting the creation of thousands of construction jobs during the project. The first phase could cost up to $15-billion. It is one of 20 proposals to export LNG from the West Coast. Low prices for LNG in export markets in Asia, however, have rendered most of the B.C. plans uneconomic, industry experts say.

No proponent of LNG exports in British Columbia has made the decision to start construction.

On Wednesday, the International Energy Agency forecast a worldwide glut of LNG over the next five years, with demand weakening in Japan and South Korea while supply rises in Australia and the United States. Pacific NorthWest LNG's venture, which has been a front-runner in the quest to export LNG from B.C., "seems likely to be delayed," the energy watchdog said.

Three B.C. plans already have received federal and provincial environmental certificates – Royal Dutch Shell-led LNG Canada's project in Kitimat; Woodfibre LNG's project near Squamish; and a joint venture by Woodside and Chevron Corp. called Kitimat LNG.

Six B.C. projects are undergoing regulatory reviews, the Canadian Environmental Assessment Agency said in a presentation at the Canada LNG Export conference last month in Vancouver.

Grassy Point LNG is one of four proposals being reviewed by the provincial regulator.

Since April, 2013, the federal regulator has been examining Pacific NorthWest LNG's plans. The agency is overseeing the review of one other proposal near Prince Rupert – the Ridley Island project that Shell inherited after it acquired BG Group.