How high is up?
A tidal wave has been turned into a tsunami of regulatory approvals for exports of LNG from the British Columbia coast, as the National Energy Board has raised the bar to even greater heights with its most recent decision.
To date, the federal government agency has issued an estimated 18 licenses (including one that involves five phases), totaling about 400 trillion cubic feet of gas for the permit terms.
However, no experts seriously expect more than five projects will go ahead, with hopes for even one or two major ventures currently at a delicate tipping point that covers the ability of proponents to find markets in Asia, raise capital and resolve differences with First Nations and environmentalists before the disputes find their way to court.
But the NEB, whose primary job is to determine whether applications cover natural gas volumes that would be surplus to Canada’s foreseeable needs, has expanded the permit horizon by issuing its first 40-year export license to the Shell-led LNG Canada consortium that includes Petro-China, Korea Gas and Mitsubishi.
The green light is for 3.23 billion cubic feet per day of feedstock gas, translating into almost 33 trillion cubic feet for the 40-year license term, 15 years greater than any previous approval.
For the license to remain valid, LNG Canada must start shipments by the end of 2022.
LNG Canada Chief Executive Officer Andy Caditz said the license is a significant milestone for the project.
“An extended term provides regulatory certainty beyond 25 years and allows us to better anticipate the economics of the project over a longer time horizon,” he said.
Ministry approvesBritish Columbia’s Ministry of Natural Gas Development said in a statement the province endorses the 40-year term.
“It improves long-term certainty for the industry and strengthens British Columbia’s competitive positioning in the global market,” the ministry said.
Not for the first time in the application process concerns were raised about the quantity of gas available in the Western Canada Sedimentary basin, the sole planned source of the gas.
Navigant Consulting, hired by LNG Canada, said there is enough supply in the basin for about 100 years, even if all of the other proposed long-term gas exports proceed.
The NEB said it is “satisfied that the natural gas resource base in Canada, as well as North America overall, is large and can accommodate reasonably foreseeable Canadian demand, including the natural gas exports proposed (by LNG Canada) and a plausible potential increase in demand.”
The export license came just days after the British Columbia Oil and Gas Commission approved an LNG Canada facility permit, which outlined design, construction and operation requirements.
It is expected that up to 7,500 workers would be employed during the construction period.
Caditz said that if a corporate sanctioning decision is made the venture “will be one of the largest energy infrastructure projects ever built in Canada and will make an important and lasting contribution to the local, provincial and national economy.”