Friday, June 12, 2015

Two conditions stand between Petronas and a Final Investment Decision on Lelu Island project

The North Coast was abuzz with anticipation yesterday as Petronas made yet another step forward in its quest to develop an LNG export terminal at Lelu Island, announcing that they had reached a Conditional Investment Decision related to the project.

In a media release from late Thursday afternoon, the Malaysian energy giant outlined how the required technical and commercial components related to their proposed development had now been satisfied, with the company resolving to move forward with its Final Investment Decision, subject to two outstanding  foundational conditions being resolved.

"The first condition is approval of the Project Development Agreement by the Legislative Assembly of British Columbia, and the second is a positive regulatory decision on Pacific NorthWest LNG’s environmental assessment by the Government of Canada."

The first of those conditions may be secured within weeks, with LNG Minister Rich Coleman outlining that he will be discussing with the Premier the timeline required to recall the Legislature to provide a vote on the Project Development Agreement.

Petronas/ Pacific NorthWest LNG move
one step closer to development of
their proposed LNG terminal
That Legislative session would provide for some debate and discussion on the recently completed agreement between Petronas and the British Columbia government, and with a public vote as part of that process,  it make for an interesting point in the local discussion on LNG development and will put on the record, where North Coast NDP MLA Jennifer Rice might be found on the issue of an LNG terminal for the Lelu Island site.

The second condition however is out of the hands of both Petronas and the BC Government, the Canadian Environmental Assessment Agency evaluation process will proceed at a timeline of the Agencies choosing.

That process currently is in a stopped mode, as the CEAA awaits further information related to the Pacific Northwest LNG project and impact to the area around Lelu Island.

And while the two conditions for forward movement do not seem to include the need for a resolution to the recent objections of the Lax Kw'alaam Band.

In their statement of Thursday, Petronas/Pacific NorthWest LNG outlined that they will "continue to seek constructive engagement with area First Nations, local communities, stakeholders and regulators"

What solutions that those discussions could offer to the current rejection of the Lelu Island site by the Lax Kw'alaams, could signal whether the contentious issue is something that can be addressed on the way towards the anticipated Final Investment Decision, or if the proposed development may face some as of yet unanticipated hurdles.

For the BC Liberal Government, Thursday's announcement provides for a boost in momentum for their highly touted LNG in BC strategy, something which Natural Gas Development Minister Rich Coleman was quick to celebrate.

“We recognize there is work to do, including an environmental assessment by the Government of Canada, as well as engagement with First Nations. 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.  ... “Developing an LNG industry will result in some of the largest private-sector investments in British Columbia’s history, stimulating economic activity throughout our province like never before. Pacific NorthWest LNG is poised to be the first major operation in this new, exciting future.”

For his part, Pacific NorthWest LNG President Michael Culbert  highlighted the impact that their project would have both on the region and the country.

"The integrated project is poised to create thousands of construction and operational careers in the midst of the current energy sector slowdown.” ... “A Final Investment Decision is a crucial step to ensure that the project stays on track to service contracted LNG customers, Pacific NorthWest LNG is poised to make a substantial investment that will benefit Canada for generations to come.”

Thursday's announcement made for a flurry of articles from the Financial and provincial media as a as they digested the latest developments and offered up some comment as to what it all may mean.

Some of those media reviews can be found below:

Globe and Mail -- Petronas led consortium vows to build B. C. LNG terminal
National Post -- Petronas gives B. C. LNG project go-ahead, but regulator says not so fast
Global BC -- Petronas announces final investment decision for Pacific NorthWest LNG project (video)
Wall Street Journal -- Malaysia's Petronas to Build Natuarl Gas Plant in British Columbia
Business in Vancouver -- Petronas' Pacific NorthWest LNG is a go
Bloomberg Business -- Petronas to Advance Canada LNG Project under two conditions
Vancouver Sun -- Malaysia-led group gives conditional approval for B. C. LNG project
Vancouver Province -- Malaysia led Petronas gives conditional approval for B. C. LNG project
Victoria News -- Petronas tentatively commits to Pacific NorthWest LNG plant
Economic Times -- Petronas gives conditional approval to Canadian LNG project
Malay on Line -- Petronas to go ahead on Canada LNG project, with two conditions
CTV BC -- Malyasia led gropu gives conditional approval for B. C. LNG project
CKNW -- Petronas gives is conditional approval for a BC LNG facility

More background on the proposed LNG Terminal development at Lelu Island can be reviewed here.

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