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Vol. 22, No. 10 Week of March 05, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

Handouts to save LNG

BC gives C$145M, 4,700 acres to 2 First Nations for Pacific NorthWest LNG project

GARY PARK

For Petroleum News

With British Columbia Premier Christy Clark only two months from facing what could the sternest test so far of her governing Liberal Party’s 16-year run of power in the province, the time has come to loosen the purse strings, freeing up a surplus cash fund of C$2 billion.

On the list of beneficiaries are First Nations, especially those standing in the way of LNG projects.

The first handout is C$145 million in funding for two aboriginal communities - the Lax Kw’alaams and Metlakalta in northwestern British Columbia - allowing Malaysia’s Petronas and its Asian partners in Pacific NorthWest to “work on a common goal of realizing” the C$36 billion venture, said chief project officer Wan Badrul Hisham.

But he declined to indicate when a final decision will be made, downplaying a prediction by Natural Gas Development Minister Rich Coleman that he expects a corporate go-ahead this year.

The pressure on Clark to keep LNG proposals from folding will intensify in the run up to voting on May 9 as the premier faces questions about her extravagant promise in the 2013 election campaign to have four LNG projects operating by 2020 and to start building a C$100 billion Prosperity Fund from LNG tax and royalty revenues.

The most significant trends in the last four years have been a sharp reductions in global LNG demand, the sudden emergence of exports from the United States and the drive by energy giants to reduce capital spending, resulting in two LNG projects in British Columbia being shelved by Shell and Chevron.

Of the 20 proposals that have been filed with regulators, only two are on the verge of final investment decisions - the massive Pacific NorthWest designed to export 12.5 million metric tons a year and the modest Woodfibre LNG plan for shipping 2.1 million metric tons a year.

Keeping them both afloat has required deft footwork by Clark’s government, including tightly held agreements with First Nations in the face of moves by some to mount federal court challenges to protect habitat for already-depleted salmon stocks.

However, Lax Kw’alaams Mayor John Helin hailed as “historic” the latest deal with the province, which included the transfer of 4,700 acres of government land.

“For the first time in my lifetime, we are really part of what is happening in our traditional territory, as far as looking after the environment and getting benefits that I think we deserve,” he said.An earlier benefits proposal of C$1.15 billion was rejected by the Lax Kw’alaams in a community vote two years ago, but former Mayor Garry Reece said he doubted Helin and his council would allow a vote on the latest benefits offer.

John Horgan, leader of British Columbia’s opposition New Democratic Party, vowed that if elected he would “find a better place and a better way” to build the Pacific NorthWest liquefaction and export terminal.

He said LNG developers such as Petronas should take their lead from Woodfibre which has worked with First Nations to scale down the size of that project.



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