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A man walks past the headquarters of the state-owned China National Offshore Oil Corp. (CNOOC) in Beijing, China Saturday, Dec. 8, 2012.

Andy Wong/AP

An Asian group led by CNOOC Ltd. of China is seeking a licence to export liquefied natural gas from British Columbia as the competition heats up to develop huge LNG megaprojects on the West Coast.

CNOOC, which acquired Calgary-based Nexen Inc. last year, and its two Japanese partners want to tap into northeastern B.C. natural gas and pipe it to Grassy Point, located near Prince Rupert in northwestern British Columbia.

Through Nexen, CNOOC owns 60 per cent of the Aurora LNG Ltd. joint venture, while the remaining 40 per cent is held by Inpex Corp. and JGC Corp., both of Japan.

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There are at least 10 plans being pitched in northwestern British Columbia to develop the province's fledgling LNG industry, but the Aurora partners assert that they have an inside track with their experience in Asia.

"The project owners propose to develop the Aurora LNG project, which will include an LNG terminal comprised of a natural gas liquefaction plant, LNG storage and marine loading terminal," the partners said in their licence application Friday to the National Energy Board. "The LNG terminal will convert natural gas into LNG for shipment by tanker to key growth markets."

A CNOOC subsidiary is the largest importer of LNG into China, Inpex is involved with seven LNG projects in Asia and JGC has designed and constructed one-third of global LNG capacity, according to the filing for a 25-year export licence.

Aurora plans to build two processing units, known as "trains" in the LNG industry, with capacity totalling 12 million tonnes a year. "The planned commissioning and first cargo is expected to be in the 2021 to 2023 time frame for the initial two trains," the application stated.

The source of Aurora's natural gas would be from property in the Liard, Horn River and Cordova shale gas fields in northeastern British Columbia. Aurora holds nearly 300,000 acres (121,407 hectares) of shale gas resource, and capital spending on the Liard basin alone is forecast to surpass $200-million in 2013.

First Nations leaders have emphasized that LNG proponents must ensure that their projects meet or exceed environmental standards. Aurora's backers said they are examining potential pipeline routes, with a view to minimizing "the extent of new disturbance" by making use of existing rights-of-way where possible.

In its filing, Aurora included a report that it commissioned from Ziff Energy to support the LNG project's contention that there are abundant natural gas supplies in Canada and North America, with plenty of reserves to be earmarked for export.

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But as U.S. natural gas supplies from the Marcellus and Utica basins are increasingly being piped to customers in Central Canada, Western Canadian gas producers are casting their eyes to Asia, where LNG has fetched premium prices.

B.C. Premier Christy Clark is on a trade mission to Asia. After spending the first week in China, she visited South Korea and her next stop is Japan. Ms. Clark, whose Asian tour wraps up next Tuesday, is pushing for further investment in the province's emerging LNG sector.

Earlier this month, the Aurora partners cleared a key hurdle in their bid to pursue an LNG project after reaching a $24-million deal with the B.C. government for exclusive rights to develop the Grassy Point property.

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