The B.C. government has conditionally approved a liquefied natural gas project led by Royal Dutch Shell PLC.
Environment Minister Mary Polak and Natural Gas Development Minister Rich Coleman attached 24 conditions in issuing an environmental assessment certificate for the Shell-led LNG Canada joint venture in Kitimat in northwestern British Columbia.
"Many of the legally binding conditions were informed by consultation with aboriginal groups and include requirements for the continued engagement of aboriginal groups, programs to support aboriginal employment," the B.C. Environment Ministry said Wednesday. "The LNG Canada export terminal will require various federal, provincial and local government permits to proceed."
LNG Canada selected industrial property on the northern end of Douglas Channel for the Kitimat terminal.
"LNG Canada must ensure the project is economically viable and meet several significant milestones related to gas supply, engineering and cost estimates, supply of labour and regulatory approval prior to making a final investment decision," LNG Canada external affairs director Susannah Pierce said in a statement.
Federal Environment Minister Leona Aglukkaq also issued a release, saying the project underwent a thorough science-based environmental review provincially in a streamlined process with the Canadian Environmental Assessment Agency (CEAA). "This decision strengthens Canada's position as a world leader in responsible resource development and will diversify Canadian energy export markets by sending clean-burning natural gas to Asia," Ms. Aglukkaq said.
Next steps for the Shell-led group include lower-profile federal and provincial regulatory approvals for certain permits. But the main environmental hurdle of obtaining the B.C. certificate and CEAA's blessing have been cleared, industry experts say. In 2013, the B.C. Environmental Assessment Office and CEAA agreed to an expedited process called "substitution," designed to reduce unnecessary duplication.
LNG Canada chief executive officer Andy Calitz said the project has made significant progress in the past year. "Receiving both provincial and federal approval of our environmental assessment is a critical milestone on our path to making a final investment decision. We could not have achieved this without input from the local community of Kitimat and First Nations, and we appreciate the local knowledge they shared with us," Mr. Calitz said in a statement.
Ellis Ross, chief councillor of the Haisla First Nation, said the aboriginal group supports the Shell-led venture, while Kitimat Mayor Phil Germuth welcomed the prospect of economic benefits for the region.
Royal Dutch Shell, through Shell Canada Energy, owns 50 per cent of LNG Canada. PetroChina Co. Ltd. holds a 20-per-cent stake while the other Asian partners are Japan's Mitsubishi Corp. and South Korea's Korea Gas Corp., which each have a 15-per-cent interest.
Analysts expect the group to make a final investment decision by mid-2016 on whether to invest up to $40-billion on construction.