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BC, Pacific NorthWest LNG, sign initial project agreements
A proposal for a liquefied natural gas project in British Columbia took a step forward May 20 when provincial officials and Pacific NorthWest LNG signed a memorandum of understanding.
In a statement the province said the MOU “sets out the steps leading toward ratification of a project development agreement between government and the company.” The PDA will require ratification by both the company and the British Columbia Legislature.
“Today reflects the beginning of the company’s final decision path toward an investment decision,” B.C. Premier Christy Clark said in a statement.
Michael Culbert, president of Pacific NorthWest LNG, said the project has made substantial progress in the past two years. “Today’s commitment by the government of B.C. to legislate our Project Development Agreement provides the certainty that our investors need as we approach a decision whether to proceed with the project,” he said.
Initial project 2 trains The LNG facility would be built on Lelu Island on land administered by the Prince Rupert Port Authority, with the first phase consisting of two liquefaction trains, storage tanks, marine infrastructure, a material offloading facility as well as administrative buildings.
Pacific NorthWest LNG is majority-owned by Petronas. JAPEX, Sinopec/Huadian, Indian Oil and Petroleum BRUNEI are also partners in Pacific NorthWest LNG and its associated natural gas supply.
Other agreements signed Michael de Jong, B.C. minister of Finance, signed a project development agreement on behalf of the government, initiating a ratification process by the company and the B.C. Legislature.
A long-term royalty agreement between the province and the company was signed by Deputy Premier and Minister of Natural Gas Development Rich Coleman.
De Jong echoed Culbert’s statement that the agreements “will help provide LNG companies with the kind of certainty they need to make long-term plans to do business in communities across B.C.”
The province is also making changes to the Petroleum and Natural Gas Act under Bill 23, the Miscellaneous Statutes Amendment Act, 2015, which allows the province to enter into long-term royalty agreements with natural gas producers specifying the rates producers will pay.
The province said it continues to consult with Tsimshian Nations regarding the project and said it has also engaged with 19 First Nations along the proposed Prince Rupert Gas Transmission Pipeline route, with 14 agreements related to the facility and pipeline achieved to date.
Approvals needed The agreements will be subject to internal approvals by Pacific NorthWest LNG and its partners and if approved by the proponent and its partners the province would recall the Legislature “as soon as practicable to introduce legislation that enables the agreement, where it will be debated publicly and be subject to approval.”
The province said B.C. has a natural gas supply estimated at 2,933 trillion cubic feet, a volume which “could support domestic and export markets for the next 150 years.” It said the project development agreement provides assurance for the long-term investments needed for the LNG facilities by providing provincial commitments on matters including infrastructure, skills and training, municipal and local government and First Nations.
Measures to be approved by the Legislature ensure project proponents “will not face significant increases in certain specific taxes and discriminatory environmental changes for the specified term of the agreement.”
- Kristen Nelson
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