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Exxon Mobil Corp. has selected on-shore terminal plans in its quest to export liquefied natural gas from a site near Prince Rupert, B.C., positioning the project as a serious contender.

While Pacific NorthWest LNG leads B.C.'s LNG race, Irving, Tex.-based Exxon Mobil and its Canadian affiliate Imperial Oil Ltd. hope to finish engineering studies in 2017 for their joint venture called WCC LNG Project Ltd.

WCC LNG disclosed in January that the capital cost for the first phase could range from $15-billion to $25-billion, and it would choose either a barge-based marine facility or on-shore terminal. Industry analysts say the on-shore system will be more expensive to build.

"After extensive study, the concept that will be considered for further definition at the Tuck Inlet project site is an on-shore LNG plant," WCC LNG regulatory manager Michael Bigler said in a letter to the B.C. Environmental Assessment Office.

Industry analysts say only three or four of the 19 B.C. LNG proposals have a realistic chance of being built, especially with a looming global glut of supplies and fierce competition worldwide to export to Asia.

"WCC LNG looks forward to working with stakeholders and First Nations to help capture associated benefits from the project while protecting the environment," Mr. Bigler said. His letter, dated April 20, was publicly posted recently by the provincial environmental regulator.

Analysts point out that the B.C. proposals are focused on building from scratch, making them more expensive than several U.S. projects that already have energy infrastructure in place.

"British Columbia's cost environment remains challenging," Imperial Oil spokesman Pius Rolheiser said in a statement, cautioning that WCC LNG is in its early stages. "We look forward to working with the B.C. and federal governments towards a predictable, durable and globally competitive LNG fiscal environment."

WCC LNG estimates that it could take seven years for construction. If the proponents decide to go ahead with construction in late 2017, LNG exports from Tuck Inlet might start in 2024 – five years after the launch date for a rival project near Prince Rupert envisaged by Pacific NorthWest LNG, which is led by Malaysia's state-owned Petronas.

Last Tuesday, the Canadian Environmental Assessment Agency halted the regulatory clock on day 263 of its review of Pacific NorthWest LNG. It marks the latest in a series of information requests sought by CEAA, but industry observers say the lengthy process could wrap up by October and still meet the 365-day timeline.

A spokeswoman for the federal regulator said CEAA requires more details about Pacific NorthWest LNG's 3-D modelling of the possible environmental impact of the terminal on Flora Bank – an area for juvenile salmon habitat, located next to the proposed $11.4-billion Lelu Island export site.

A report in January prepared for the Lax Kw'alaams First Nation by SedTrend Analysis Ltd. raised environmental alarm bells, but a Pacific NorthWest LNG-commissioned study by engineering firm Stantec Inc. argues there will be little to no environmental impact from building an LNG terminal on Lelu Island. "The 3-D modelling work requires updating to increase certainty in the results," CEAA said.

The picturesque island near Prince Rupert is part of the traditional territory of the Lax Kw'alaams. Last month, members of the Lax Kw'alaams overwhelmingly rejected a $1-billion cash offer over 40 years from Pacific NorthWest LNG, declining to give aboriginal consent to the project.

"Pacific NorthWest LNG will continue to work constructively and diligently with the Government of Canada, area First Nations and other stakeholders to answer questions regarding our environmental assessment," said Spencer Sproule, Pacific NorthWest LNG's senior adviser of corporate affairs.

WCC LNG said it is consulting with First Nations, vowing to "increase its aboriginal and community engagement in parallel with the environmental assessment process."

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