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British Columbia Pacific Traverse seeks NEB and Haisla approval to export propane

A private B.C. company is proposing to build a propane export terminal in the Kitimat area, saying it will be eager to forge ahead if the Haisla Nation grants permission.

Pacific Traverse Energy Ltd. applied this week for an export licence from the National Energy Board, promising that "the project will only proceed with Haisla consent."

In an interview before the regulatory filing, Haisla chief councillor Crystal Smith said she and her colleagues on the elected council are supportive of the concept of propane exports.

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Separately, the Haisla council backs a joint venture led by Royal Dutch Shell PLC that hopes to build a facility to export liquefied natural gas from an industrial site in Kitimat.

"Acceptable exports through our territory and through Douglas Channel would be propane and LNG," Ms. Smith said, noting that the Haisla opposed the ill-fated Northern Gateway oil pipeline proposal.

The safety and environmental risks in transporting propane and LNG are manageable, she said.

"Those are two acceptable commodities that we would definitely welcome and open up our doors to."

She declined to comment specifically on Pacific Traverse's plans, but expressed confidence in the ability of the Haisla to commission its own environmental review of any proposal to export propane.

"We know our territory. We know the valuable resources that we have. We're the specialists when it comes to anything environmental within our territory," Ms. Smith said.

In its application to the NEB, Vancouver-based Pacific Traverse said it is keen to export the equivalent of up to 46,000 barrels a day of propane.

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"The project will be built, in part, on Haisla land in the Kitimat area and within the traditional territory of the Haisla," the company said.

"The applicant has engaged with Haisla to review the project and its various elements. The applicant is also negotiating agreements with the Haisla to define the land use and the relationship the Haisla will have with the project and the applicant."

LNG projects have faltered in British Columbia, and no LNG terminal is under construction.

In 2017, cancellations included Shell's Prince Rupert LNG plans on Ridley Island, the Petronas-led Pacific NorthWest LNG joint venture on Lelu Island and the Aurora LNG consortium led by China National Offshore Oil Corp. on Digby Island.

By contrast, one propane terminal is being built in British Columbia.

Last year, Calgary-based AltaGas Ltd. began construction on its $500-million propane export terminal on Ridley Island, located within the Port of Prince Rupert. AltaGas expects to start operations next year.

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Ridley Terminals Inc., the Prince Rupert Port Authority and Transport Canada oversaw the environmental review process for the AltaGas propane terminal.

They determined in late 2016 that under section 67 of the Canadian Environmental Assessment Act, "the project is not likely to cause significant adverse environmental effects within the meaning of CEAA."

Ridley Island and nearby waters are under the federal jurisdiction of the Prince Rupert Port Authority, and also within the traditional Indigenous territory of the Lax Kw'alaams and Metlakatla.

Calgary-based Pembina Pipeline Corp. gave the go-ahead late last year for its plans to export propane from Watson Island near Prince Rupert, subject to environmental and regulatory approvals.

Pacific Traverse did not indicate which environmental regulator might be involved with its project, and it is not yet known whether the B.C. Environmental Assessment Office would take the lead role.

The application to the NEB is seeking a 25-year export licence, relying on propane supplies in Western Canada.

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"The basic project components to be constructed in Kitimat include transportation infrastructure to transfer the propane to the terminal from the existing railway terminus in Kitimat, including a new rail terminal and transfer yard, and transfer pipeline that connects the transfer yard to the marine terminal," the company said.

"The new export location is attractive to propane suppliers in Western Canada who wish to serve Asian markets because of its proximity to their supply."

Pacific Traverse plans to make its final investment decision next year, with the goal to begin exports at the end of 2020, averaging three shipments per month when running at full capacity.

"The applicant shared this application with the Haisla before it was filed, and the Haisla consented to the applicant filing the application," according to the firm's filing to the NEB.

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