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Native people fear Pacific NorthWest LNG’s terminal on Lelu Island will harm their way of life.Pacific NorthWest

A consortium led by Malaysia's state-owned Petronas is slated to make a preliminary decision this week on whether to forge ahead with plans to export liquefied natural gas from British Columbia.

The decision could be made and announced as early as Thursday night after one of the top executives from Petronas visits Vancouver to discuss key issues with management at Pacific NorthWest LNG and other representatives from the joint venture. Petronas is the lead partner in the project backed by two firms from China and one each from Japan, India and Brunei.

A Petronas spokesman in Kuala Lumpur confirmed that Wee Yiaw Hin, a Petronas executive vice-president who serves as Pacific NorthWest LNG chairman, will be at the Vancouver meeting. While the Petronas spokesman declined to comment on Thursday's agenda, an industry observer said Mr. Wee and other officials are scheduled to review the economics of the project, tally the progress so far and examine hurdles still ahead.

Pacific NorthWest LNG will have the option to render a "soft" investment decision to move forward, and set aside environmental and First Nations issues to resolve at a later date, the observer said. Under that scenario, a final investment decision would be made this fall, pending the outcome of a federal environment assessment.

Pacific NorthWest LNG signed a development deal three weeks ago with the B.C. government. The agreement spells out the tax regime and LNG rules for the long term, reducing the risks for the joint venture's Asian backers. Pacific NorthWest LNG also has been able to chop estimated construction costs and stands to benefit from an expanded pool for skilled labour as a result of layoffs in Alberta's oil patch.

The Petronas-led group is striving to become the first major LNG exporter in the province, targeting a 2019 launch date amid fierce global competition to supply energy-thirsty Asian customers.

The main challenges are winning regulatory approval from the Canadian Environmental Assessment Agency (CEAA) and securing support from First Nations, notably from the Lax Kw'alaams. Members of the Lax Kw'alaams declined to provide aboriginal consent last month, overwhelmingly rejecting a $1-billion cash offer over 40 years from Pacific NorthWest LNG. The proponent and the Lax Kw'alaams remain far apart, and it will take creative thinking to find a compromise.

Catherine Ponsford, CEAA's project manager for the Pacific and Yukon region, wrote a letter June 2 to Michael Lambert, Pacific NorthWest LNG's head of environmental and regulatory affairs. "The agency remains committed to working with you, federal department experts and aboriginal groups to confirm the necessary work that would be undertaken collaboratively to support the completion of the environmental assessment process," Ms. Ponsford wrote in the letter obtained by The Globe and Mail.

She attached a report from Fisheries and Oceans Canada that provided several recommendations to reduce the environmental impact if Pacific NorthWest LNG builds an $11.4-billion LNG export terminal on Lelu Island in northwestern British Columbia. The Lax Kw'alaams and environmental groups are worried that nearby juvenile salmon habitat in Flora Bank's eelgrass will be harmed.

Options to help mitigate damage include implementing "best management practices" during construction, starting an eelgrass monitoring program and introducing "offsetting" measures to improve fish habitat elsewhere within Chatham Sound, said the report by Fisheries and Oceans .

Natural Resources Canada also weighed in, saying a recent Pacific NorthWest LNG-commissioned study by engineering firm Stantec Inc. "likely underestimated" the environmental impact on Flora Bank, a sandy area visible at low tide in the Skeena River estuary.

The two federal departments told CEAA that it is unclear what the impact would be of a proposed suspension bridge over Flora Bank to protect the area. Pacific NorthWest LNG would construct the 1.6-kilometre-long suspension bridge to carry a pipeline over the northwest flank of Flora Bank and then connect with a 1.1-kilometre-long, trestle-supported jetty that would extend in a southwesterly direction to a marine terminal for ocean-going LNG tankers.

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