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In the foreground is Lelu Island, site of an LNG export terminal proposed by Pacific NorthWest LNG.

Brent Jang/The Globe and Mail

The federal fisheries department has provided a road map for Pacific NorthWest LNG to follow to reduce the project's environmental impact in British Columbia.

Plans to export liquefied natural gas from Lelu Island must place a high priority on protecting juvenile salmon habitat in an area with eelgrass called Flora Bank, said Fisheries and Oceans Canada. The department made its recommendations in a report in late May to the Canadian Environmental Assessment Agency (CEAA), which is reviewing the project filed by the LNG group led by Malaysia's state-owned Petronas.

On Thursday, Pacific NorthWest LNG gave conditional approval to press ahead with plans to build an $11.4-billion export terminal on Lelu Island, located near Prince Rupert on B.C.'s north coast. The Petronas-led group said it will proceed, subject to two conditions: CEAA's seal of approval and the B.C. legislature's ratification of a project development agreement between the province and Pacific NorthWest LNG.

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CEAA halted its review on June 2 – day 263 of the 365-day process. It is unclear when the regulatory clock will restart, but in a letter obtained by The Globe and Mail, CEAA said it needed to pause its assessment because of insufficient information from Pacific NorthWest LNG.

Catherine Ponsford, CEAA's project manager for the Pacific and Yukon region, left the door open for a resolution. "We remain available to review preliminary or draft information as it becomes available so it can be considered in a timely manner," she wrote in her letter to Pacific NorthWest LNG. "The agency appreciates your continued collaboration on this important file and we look forward to working with you on these next steps."

Fisheries and Oceans Canada, formerly called the Department of Fisheries and Oceans (and still commonly known as DFO), offered suggestions to reduce harmful environmental impacts. DFO said mitigation measures will be crucial during construction and operations, and it also recommends an "offsetting" program to improve fish habitat elsewhere in Chatham Sound. "Should the project result in impacts to Flora Bank eelgrass, this impact would need to be offset," DFO said in its internal report to CEAA.

The monitoring program would include keeping tabs on eelgrass, erosion, water quality and any changes to commercial, recreational and aboriginal fisheries.

Pacific NorthWest LNG president Michael Culbert said the focus is on mitigating any potential adverse environmental impacts.

Pacific NorthWest LNG's proposed suspension bridge over Flora Bank would extend southwest for 1.6 kilometres away from Lelu Island. That span would connect with a 1.1-kilometre-long trestle to a deep-berth location for LNG tankers in Chatham Sound.

"We've designed this suspension bridge infrastructure, which is world-class infrastructure," Mr. Culbert said in an interview Friday. "We've had some very good discussions since that letter was issued."

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Natural Resources Canada also submitted a report to CEAA, saying it shares DFO's view that "the proponent has not adequately substantiated its conclusions" that minimized concerns about Flora Bank, which is in the traditional territory of the Lax Kw'alaams First Nation. Last month, members of the Lax Kw'alaams declined to provide aboriginal consent, rejecting Pacific NorthWest LNG's $1-billion cash offer over 40 years.

B.C. Deputy Premier Rich Coleman, who is the province's Natural Gas Development Minster, said Pacific NorthWest LNG has stepped up efforts to focus on mitigating the effects of the project on juvenile salmon habitat. "The company made some significant progress on that, and that will be shared with the First Nation," Mr. Coleman said in an interview. "Pacific NorthWest LNG has added some more horsepower to making sure they deal with the issues, particularly Flora Bank and fisheries."

The fisheries department expressed skepticism about a Pacific NorthWest LNG-commissioned report prepared by engineering firm Stantec Inc., which argued through 3-D modelling that the project would have little to no impact on Flora Bank in the Skeena River estuary.

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