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An artistic rendering of Pacific NorthWest LNG’s proposed LNG export terminal on Lelu Island.

The Lax Kw'alaam Band, which threatened to block the Pacific NorthWest LNG project, now says it is willing to support the development – so long as the federal government establishes a committee that includes the First Nations community and enforces environmental standards.

The Lax Kw'alaam position could remove a key roadblock to what would be British Columbia's first liquefied natural gas export project, given that the band had previously filed a legal challenge claiming ownership of Lelu Island, where the terminal would be constructed.

In a letter to federal Environment Minister Catherine McKenna, Lax Kw'alaam Mayor John Helin said the community had held further discussions on the project, which they had voted to oppose last year, and is willing to change its stance.

It will support Pacific NorthWest LNG only if the government establishes an "environmental performance committee" that would monitor the company's compliance with conditions and recommend enforcement measures to the government.

"While we understand the potential for social and economic opportunities that LNG development and this project may bring to our members, Lax Kw'alaams must ensure that sufficient environmental conditions and safeguards will be in place," Mr. Helin wrote in a letter filed this week with the Canadian Environmental Assessment Agency.

If the government does not meet the band's condition by May 13, "we will retract our support for the project," he added.

The Pacific NorthWest LNG project is led by Malaysia's state-owned Petronas, which is promising $36-billion in investment in the liquefaction plant, as well as in the upstream gas extraction and pipelines needed to supply it. Assuming that it gets a green light from Ottawa, Pacific NorthWest has said it will make a final investment decision this spring.

Meanwhile, Ms. McKenna announced that a smaller project, Woodfibre LNG, was found not to pose a significant environmental risk, clearing the way for its final federal approval.

Mr. Helin is a newly elected major of the Lax Kw'alaam council and faces a divided community, with some hereditary elders opposing the project and others in support.

In a statement released on Friday, some Lax Kw'alaam hereditary leaders distanced themselves from Mr. Helin, and insisted that the government must consult a specific "tribe" of the band that claims aboriginal rights over Lelu Island.

"We have been betrayed by our elected leader. Elected band councils have no jurisdiction off of reserve land," said Donald Wesley, hereditary chief of the Gitwilgyoots Tribe, which claims Lelu. "Legal precedents in the Supreme Court of Canada are all in our favour as hereditary chiefs, and we will fight this to the end, whether the band council is on our side or not."

The Lax community would enjoy huge financial benefits if the project goes ahead. The band said last year that it would receive an initial payment of $28-million and annual ones starting at $13-million and rising to $50-million in 40 years. Still, many in the community fear that it will destroy traditional fishing and aquaculture harvesting.

The Canadian Environmental Assessment Agency is expected to conclude its review of the project and submit its final report to Ms. McKenna next week. In its draft report, the agency found that the project would cause significant environmental impact on the harbour porpoise and on greenhouse gas emissions, but not on salmon spawning grounds, as the Lax Kw'alaam fear. A group of prominent scientists recently rejected its conclusion regarding fish habitat.

If the final report maintains the view that there would be some significant adverse environmental impacts, Ms. McKenna must either turn down the project or refer it to the cabinet for approval.

B.C. Premier Christy Clark is aggressively promoting the nascent LNG industry in her province, saying it could be a significant generator of employment and tax revenue.

Many environmentalists oppose the construction of LNG export terminals, arguing that it will drive up greenhouse-gas emissions in British Columbia and threaten local fish habitats.

In a statement on Friday, B.C. Natural Gas Development Minister Rich Coleman welcomed the Lax Kw'alaams' change of heart.

"The Lax Kw'alaams have been clear any development must not harm the environment, especially fish and fish habitat," Mr. Coleman said in a statement. "The protection of fish habitat and the marine environment is also a core priority of the government of B.C. and we look forward to working together on this should Ottawa reach a positive decision."

A Pacific Northwest spokesman said the company is considering the condition proposed by the Lax and looks forward to discussion on the terms of reference.

"A substantive and meaningful leadership role for Tsimshian First Nations, including Lax Kw'alaams, is vital to building trust and confidence with those who hold cultural and economic ties to the Skeena Estuary," PNW's Spencer Sproule said in an e-mail.

With a report from Brent Jang