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NEB approves two more LNG export licence applications

The Tokyo Gas Ohgishima LNG Terminal.

NATHAN VANDERKLIPPE/THE GLOBE AND MAIL

The National Energy Board has approved two more liquefied natural gas export licence applications in an increasingly crowded field.

The NEB gave the licence approvals for 25 years each to Aurora Liquefied Natural Gas Ltd. (backed by Beijing-based CNOOC Ltd.'s Nexen unit and Inpex Corp. and JGC Corp., both of Japan) and Oregon LNG Marketing Co. LLC (backed by New York-based Leucadia National Corp.).

"Recent developments in gas production technology have resulted in a significant increase in the Canadian gas resource base and North American gas supply. One of the major impacts of this increase is lower demand for Canadian gas in traditional gas markets in the United States and Eastern Canada. As a result, the Canadian gas industry is seeking to access overseas gas markets," the NEB said Thursday.

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With the approvals for Aurora LNG and Oregon LNG, there are now 11 LNG export applications that have been given the green light by the NEB. Nine of the projects are proposed for British Columbia while two have Oregon terminals envisaged.

None of those 11 projects, however, have made final investment decisions.

Aurora LNG is seeking to build an export terminal at Grassy Point, near Prince Rupert in northwestern British Columbia. Oregon LNG plans to move natural gas, most of it from Western Canada, to an Oregon plant that would super-cool the gas into liquid form so that it is suitable for shipping by tanker to Asian customers.

"Issuance of both licences is subject to the approval of the Governor in Council," the NEB noted.

As well, Oregon LNG must still clear regulatory hurdles in the United States. The other proposal in Oregon is named Jordan Cove LNG LP, which received its NEB licence approval in February.

Two weeks ago, the NEB approved a filing from Triton LNG for exporting. Triton is backed by Calgary-based AltaGas Ltd. and Japan's Idemitsu Kosan Co. Ltd.

With Aurora LNG getting the nod, there are now four B.C.-based, export-approved LNG projects that include Japanese investors. Japan is the planet's largest importer of LNG, while demand in China is surging.

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The other two B.C. projects with Japanese partners are Pacific NorthWest LNG (led by Malaysia's Petronas, with partners that include Japan Petroleum Exploration) and LNG Canada (led by Shell Canada Ltd., with investors that include Mitsubishi Corp. of Japan).

Industry experts say it is realistic to expect three B.C. LNG projects out of 14 proposals to come to fruition, and six out of nearly 30 in the United States.

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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