Michael Culbert is heartened when he ponders the prospects for exporting liquefied natural gas from Canada, despite a global glut of LNG that could last years.
Mr. Culbert, president of Pacific NorthWest LNG, acknowledges the challenges in the short term of making plans to build an export terminal on British Columbia's north coast. He is hoping for approval from the Canadian Environmental Assessment Agency (CEAA), a decision that would allow the consortium to start constructing an $11.4-billion terminal on Lelu Island in the port of Prince Rupert. If construction begins in mid-2016, it will likely take four to five years to complete the facility, so exports might flow in 2020 or 2021.
Pacific NorthWest LNG, led by Malaysia's state-owned Petronas, is well aware of analysts' warnings of a worldwide glut of LNG from 2016 to 2019 and possibly beyond. The current price spread between natural gas in Canada and LNG contracts in Asia is narrow, making most B.C. proposals uneconomic in today's circumstances.
But Mr. Culbert believes the consortium will find a sweet spot as early as 2020, since the venture's co-owners are financial backers and also "off-take partners" – long-term buyers of LNG in Asia. "Placing this LNG into the market in the 2020 to 2021 time frame is extremely important," he said in an interview. "Time is of the essence, time is important to our project. We've positioned ourselves to be shovel-ready once we get the decision from CEAA."
Some aboriginal organizations support Pacific NorthWest LNG, but the venture's backers must deal with opposition from the Lax Kw'alaams First Nation.
"That's just the reality in a democracy. People have the right to their opinions, and that is fair enough," Mr. Culbert said. "Our job as the proponent is to provide the information that the regulators need to make their decision for the benefit of all Canadians."
Rich Coleman, British Columbia's Minister of Natural Gas Development, said Pacific North-West LNG's scientific studies offer assurances that the project won't have any significant impact on fish. "The science is very strong and the work that has been done is very strong. Sooner or later, you have to accept the fact that the professionals have done their work," Mr. Coleman said.
John Helin, the Lax Kw'alaams mayor who was elected in November, has been willing to listen to pro-LNG arguments. Mr. Coleman and B.C. Premier Christy Clark met last month with Mr. Helin in an effort to find common ground on LNG.
But Greg Horne, energy co-ordinator with the Skeena Watershed Conservation Coalition, said aboriginal-commissioned scientific reports conclude the project will ruin the eelgrass on Flora Bank, a sandy area that nurtures juvenile salmon next to Lelu Island. "There is now abundant scientific evidence that shows this LNG facility on Lelu Island will spell catastrophe for Canada's second-largest wild salmon fishery."
Mr. Horne said the Petronas-led consortium's plans for a trestle-supported pier that leads to a dock for LNG tankers pose a major risk to Flora Bank. The issue of the eelgrass is a touchy one. Pacific NorthWest LNG apologized last month for a design error in one of its eelgrass maps after the coalition and others such as T. Buck Suzuki Environmental Foundation and Friends of Wild Salmon complained about the inaccurate depiction. Flora Bank and Lelu Island are part of the traditional territory of the Allied Tribes of Lax Kw'alaams.
Pacific NorthWest LNG released a new video this week, with the narrator saying, "We don't have to choose between LNG or the sustainability of the Skeena River salmon population. The responsible, regulated development of Pacific NorthWest LNG will enable the safe construction of our project and the continued success of the Skeena River fishery, all while protecting the coastal lifestyle we all enjoy."
There are 20 B.C. LNG proposals, although industry analysts say only a handful of ventures have a realistic chance. The Shell-led LNG Canada project in Kitimat has been gaining momentum. This week, the National Energy Board approved a 40-year export licence for LNG Canada.
Garnering First Nations support is an important goal for B.C. LNG backers. Members of the Lax Kw'alaams overwhelmingly rejected Pacific NorthWest LNG's attempts in 2015 to secure aboriginal consent for the project.