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An artistic rendering of Pacific NorthWest LNG’s proposals for a liquefied natural gas dock, suspension bridge and export terminal on Lelu Island, near Prince Rupert in northwestern British Columbia.

Pacific NorthWest LNG's project in British Columbia would likely harm harbour porpoises and contribute to climate change, but the export terminal could be built and operated without causing major ecological damage, the Canadian Environmental Assessment Agency has ruled.

CEAA issued a 257-page draft environmental assessment report Wednesday into the proposal by Pacific NorthWest LNG, which wants to export liquefied natural gas from an $11.4-billion terminal planned for Lelu Island in the Port of Prince Rupert.

There will be large increases in greenhouse gas emissions from natural gas production, processing and pipelines, said CEAA, which also warns about the impact on harbour porpoises.

"With respect to all other valued components, the agency concludes that the project is not likely to cause significant adverse environmental effects taking into account the implementation of the key mitigation measures," according to CEAA.

The consortium led by Malaysia's state-owned Petronas faces a series of conditions outlined in a separate 20-page document. Those recommendations include monitoring salmon habitat in Flora Bank, a sandy area located next to Lelu Island. Another potential condition is the implementation of programs to reduce the adverse environmental effects.

"High densities of harbour porpoises are found in the shallow waters around Prince Rupert and throughout the southern portion of Chatham Sound," the draft assessment report said.

The federal regulator, which started its review into Pacific NorthWest LNG in April, 2013, said a new 30-day public comment period will wrap up March 11. Any conditions set by federal Environment Minister Catherine McKenna will become legally binding. She is expected to make her decision on or about March 22, barring any further delays in the process. Wednesday marked Day 324 on the 365-day regulatory clock.

The report took note of opposition from the Lax Kw'alaams First Nation. "Lax Kw'alaams Band is concerned that Flora Bank could be at risk of being lost altogether; the marine terminal infrastructure could affect the high energy processes that hold Flora Bank in place," CEAA said.

A proposed suspension bridge over Flora Bank has been designed to vastly minimize dredging. That span would connect with a pier to a deep-berth location for LNG carriers in Chatham Sound. Two supporting structures in the water should be circular in shape to reduce the environmental impact, federal scientists recommended last month.

In late January, Ottawa said energy projects under review must clear new hurdles, especially taking into account carbon emissions related to natural gas production and pipelines.

The Petronas-led group calculated its project "would increase greenhouse gas emissions for the Province of B.C. by 8.5 per cent and for Canada by 0.75 per cent. Globally, the project would increase greenhouse gas emissions by 0.015 per cent," CEAA said.

"Using several sources, Environment and Climate Change Canada estimated that upstream emissions associated with the project would range from 6.5 to 8.7 million tonnes" a year of equivalent carbon dioxide. Direct greenhouse gas emissions have been estimated to be 4.9 tonnes a year of equivalent carbon dioxide by Pacific NorthWest LNG, a reduction from 5.2 million "due to further engineering refinements," CEAA said.

The agency said it examined a wide range of other factors such as aboriginal fishing and hunting rights, noting that the mitigation measures will be considered by Ms. McKenna.

Spencer Sproule, Pacific NorthWest LNG's senior adviser of corporate affairs, said the consortium is studying the draft report and conditions.

"Pacific NorthWest LNG would like to thank the government of Canada, First Nations and community members for their constructive and rigorous approach with respect to the federal environmental assessment," Mr. Sproule said.

He said the projects co-owners are "committed to building and operating a world-class LNG facility in an environmentally sustainable manner that First Nations and residents in the region can be proud of."

Greg Horne, energy co-ordinator with Skeena Watershed Conservation Coalition, expressed disappointment and said the CEAA process is broken.

"It is an incredibly superficial report that omits critical peer-reviewed science that is key to properly assessing the true environmental impacts of the LNG project," he said in a statement. Mr. Horne said the draft report's findings playing down impacts on salmon are incorrect, "given the scientifically established importance of Flora Bank to Skeena salmon."