Skip to main content

Port Edward’s population will skyrocket if LNG becomes reality in its backyard, while British Columbia’s fledgling LNG industry will gain liftoff after much

On the back deck of Port Edward Town Hall, Mayor Dave MacDonald sees Lelu Island across the waters of Porpoise Channel and dreams of a massive liquefied natural gas terminal proposed by Malaysia's state-owned Petronas.

Port Edward's population will skyrocket if LNG becomes reality in its backyard, while British Columbia's fledgling LNG industry will gain liftoff after much hype.

Excitement is growing in the northern B.C. community of nearly 600 residents as Petronas chief executive officer Shamsul Azhar Abbas visits Vancouver for crucial meetings on Monday.

The Malaysian energy company leads the Pacific NorthWest LNG joint venture, which is edging closer to making a final investment decision on its $11.4-billion proposal to export LNG from Lelu Island to energy-hungry customers in Asia.

In Mr. MacDonald's mind, the stars are lining up for Mr. Shamsul and executives from the project's other partners to give the conditional go-ahead within days, even if it isn't strictly a final investment decision. There have been 18 B.C. LNG projects proposed, but none of the companies has approved spending the billions of dollars required to make its LNG dreams come true.

Mr. Shamsul is slated to meet B.C. Premier Christy Clark and Rich Coleman, the province's Natural Gas Development Minister in Vancouver.

The Petronas CEO is also expected to be briefed by senior officials at Pacific NorthWest LNG on the B.C. Environmental Assessment Office's 301-page report that recently approved the project provincially. The B.C. environmental assessment certificate issued last week is subject to the project adhering to eight conditions, mostly related to environmental monitoring issues and ongoing aboriginal consultations.

At the peak of construction, Pacific NorthWest LNG would require nearly 4,500 workers. And should the LNG terminal open in 2019 as scheduled, there will be more than 330 employees needed to operate the Lelu Island plant, at least 180 on-site maintenance contractors and 130 staff in Vancouver.

Mr. MacDonald is thinking ahead, having set aside Port Edward district land that will be suitable for work camp housing.

"You'll never get rid of all the concerns. No matter what, there is always going to be someone unhappy. I have friends who are concerned and I hear them, but we need to improve the economy in the area," said Mr. MacDonald, who won re-election in November to his fourth term as District of Port Edward Mayor.

Industry analysts believe Pacific NorthWest LNG is leaning toward forging ahead, subject to approval in mid-2015 from the Canadian Environmental Assessment Agency.

Pacfic NorthWest LNG is in the final stages of studying the project's economics, including the extra costs for building a suspension bridge to avoid harming salmon habitat in Flora Bank. Environmentalists and First Nations leaders, who will be watching the venture to ensure it complies with the eight conditions, remain worried about the fate of juvenile salmon.

The B.C. environmental agency said the project "is not likely to have significant adverse residual effects on marine resources." But in approving the venture, the agency acknowledged that Pacific NorthWest LNG "would have significant residual adverse effects on greenhouse gas emissions."

Pacific NorthWest LNG is expected to have greenhouse gas emissions intensity of 0.19 to 0.22 carbon dioxide equivalent tonnes for each tonne of LNG produced. That is above the B.C. government's benchmark of 0.16, so the project would need to buy carbon offsets or to contribute to a technology fund – amounting to what industry analysts describe as paying extra taxes.

An estimated $3.4-billion of the project's construction costs are to be spent in Canada, mostly in British Columbia, while the remaining $8-billion would be imported goods and services, according to regulatory filings.

Ventures such as Pacific NorthWest LNG are committed to developing projects in an environmentally sound manner, said David Keane, president of the B.C. LNG Alliance, whose seven members include the Petronas-led group.

"These companies will bring best practices to the industry. They will bring a lot to the industry in terms of how they view the environment, how they manage water, how they manage greenhouse gas emissions," Mr. Keane said in an interview.