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A trio of projects has been proposed for Kitimat, B.C.JOHN LEHMANN/The Globe and Mail

The B.C. government is preparing to auction land on its northern coast in hopes of establishing a third cluster of natural-gas export terminals.

Grassy Point is located on a narrow peninsula 30 kilometres north of Prince Rupert, and across a small bay from Lax Kw'alaams First Nation. It has been a historical site of interest for liquefied natural gas exports, including from Dome Petroleum, which no longer exists, in the 1980s.

Now British Columbia, in the midst of a broad push to woo billions in LNG spending, is hoping others will plan their massive projects there. This weekend, shortly before it hosts a major LNG conference in Vancouver, the government will begin advertising for expressions of interest.

"There's some preliminary interest in land in that area, and so that's why we're advertising it," said Vivian Thomas, a spokeswoman with the Ministry of Forests, Lands and Natural Resource Operations.

The Crown land could be sold or, more likely, provided to a company on a long-term lease.

If the government succeeds, Grassy Point will become the third major potential centre on the B.C. coast for LNG exports. A trio of projects has been proposed for Kitimat, and another two for Prince Rupert. Establishing a third area could help bolster the Liberal government's contention that LNG exports could transform B.C.'s economy.

In recent weeks, ministers have suggested LNG projects could help wipe out provincial debt and eliminate the sales tax. The government, however, has also talked about imposing new taxes on the nascent industry, prompting warnings that it stands to kill a goose that has yet to lay a golden egg.

Exxon Mobil Corp. and Nexen Inc. are among the two most prominent companies pursuing LNG projects without chosen sites. AtlaGas Ltd. has also signed an agreement to pursue an LNG export terminal.

On Thursday, Bruce March, the outgoing chief executive of Exxon subsidiary Imperial Oil Ltd., said his company continues to look at the option of LNG exports. "LNG is a very challenging – a very big project. We're very, very early in the early development planning of all that," he said.

"We're very, very methodical in concept selection and working a big project like that in the very early stages. So we don't have a timeline at all in terms of when we're going to progress, but we look at these as real opportunities."

Nexen declined to comment.

British Columbia's rocky northern shores provide limited areas for construction. When Dome was looking for a site more than 30 years ago, it chose Grassy Point for its proximity to open-sea sailing and its stable, hard-rock topography. Dome secured land, gained approval to build the plant and signed a liquefied gas sales agreement with a Japanese company. But when Dome faltered, the project ended.

Grassy Point does have drawbacks; it is not served by roads or rail, and the Lax Kw'alaams community does not have the amenities to serve a large construction project and industrial site.

For Dome, however, it came with an important advantage: At the time, the Lax Kw'alaams people agreed to a benefits deal that would allow the project to be built. The Lax Kw'alaams retain an active interest in business. The group opened a trade office in Beijing in 2009, and have sold timber to China.

With files from reporter Kelly Cryderman in Calgary

Follow Nathan VanderKlippe on Twitter: @nvanderklippeOpens in a new window

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