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Malaysia-led group gives conditional approval for B.C. LNG project

Petronas Premier Clark LNG deal - Mychaylo Prystupa -- Vancouver Observer
Michael Culbert, President and CEO of Pacific NorthWest LNG / Progress Energy shakes hands with B.C. Premier Christy Clark at an LNG royalties agreement signing in Vancouver last month. Photo by Mychaylo Prystupa.

Despite an overwhelming rejection of a $1-billion offer to local Lax Kw’alaams band members to advance the project, a Malaysia-led consortium has announced conditional approval for a potential $36-billion liquefied natural gas project in northwest British Columbia.

Pacific NorthWest LNG, which is controlled by Malaysian energy giant Petronas, says it will confirm a final investment decision on the project subject to two conditions.

The first condition is approval of the project development agreement by the B.C. legislature, while the second condition is a positive environmental assessment by the federal government.

"We recognize there is work to do, including an environmental assessment by
the Government of Canada, as well as engagement with First Nations," said Natural Gas Development Minister Rich Coleman.

"The Province of British Columbia will continue to work with all partners to
ensure the project is developed with the highest standards of environmental
protection and enhancement," he added.

President Michael Culbert says Pacific NorthWest LNG will continue to engage with area First Nations, local communities, stakeholders and regulators.

He says the project is poised to create thousands of construction and operational careers amid the current energy sector slowdown.

Last month, Lax Kw’alaams voted unanamously against giving their consent for the construction of a terminal facility on Lelu Island, south of Prince Rupert at the head of the Skeena River.

Aerial Skeena estuary at Lelu Island - Brian Huntington

Aerial view of Lelu and Ridley Islands near Prince Rupert where two LNG terminals are planned.  Photo Brian Huntington.

"Hopefully the public will recognize that unanimous consensus ... sends an unequivocal message," said the band's Mayor Garry Reece in a statement on May 14.

"This is not a money issue: this is environmental and cultural," he added.  Mayor Reece was immediately available for comment Thursday evening.

The main concern is the project's potential impact on neighbouring Flora Bank, a marine ecosystem immediately adjacent to Lelu Island and over which a pipeline-toting suspension bridge has been proposed.  

The First Nation says the area's fertile eel grass beds are important habitat for maturing fish and other marine animals.

A government source said the Liberals are expected to decide by the end of next week whether to recall the B.C. legislature to adopt legislation for the project.

Bruce Ralston, natural gas critic for the Opposition New Democrats, said his party is looking forward to the possibility of a final investment, but there are still major hurdles to overcome.

"Unfortunately, the big promises made by (Premier Christy Clark) and the B.C. Liberals in the last election have still not been met. There are no shovels in the ground, and no final investment decisions," he said.

Ralston said First Nations must be involved as "true partners," but the project is a long way from getting their support. He added the federal environmental review has been repeatedly delayed and will not be finished until at least this fall.

The consortium proposing to build an LNG export facility at Lelu Island near Prince Rupert, B.C., which would represent the largest capital investment in the province's history.

Pacific NorthWest LNG is comprised of Petronas, Sinopec, JAPEX, Indian Oil Corporation and PetroleumBRUNEI.

With files from Mychaylo Prystupa.

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