Monday, October 17, 2016

LNG Minister Coleman hails momentum that NEB export licence extension provides for Pacific NorthWest LNG

Deputy Premier and LNG
Minister Rich Coleman
took note of the recent
NEB export licence extension
for Pacific NorthWest LNG
The announcement by the National Energy Board on last Thursday of an extension to the terms of a export licence for Pacific NorthWest LNG, found a favourable response from  the BC Cabinet Minister responsible for LNG in the province.

Over the weekend, Deputy Premier and LNG Minister, Rich Coleman found much to celebrate with the NEB announcement:

“British Columbia’s aspiration to build a liquefied natural gas (LNG) export industry is gaining momentum with Pacific NorthWest LNG’s receiving an extended export licence."

The LNG Minister added that such approvals are essential for certainty in the LNG industry:

”Export approvals from Canada’s National Energy Board are essential, providing proponents with the assurance they need to secure customer contracts and, ultimately, reach a final investment decision. This extension immediately improves Pacific NorthWest LNG’s long-term certainty and strengthens its competitive positioning in the global market."

You can review the full statement from Minister Coleman here.

Coleman was reacting to the terms of the extension from the NEB which provided approval for a  request from Pacific NorthWest LNG which was first put in front of the board back in February.

The Board has decided to issue a 40-year Licence to Pacific NorthWest, subject to Governor in Council approval, to export natural gas subject to the terms and conditions described in Appendix I to this letter.
The NEB issued a licence
extension for Pacific NorthWest
LNG last week, giving the energy
proponent forty years of certainty
for potential energy shipments

We have determined that the quantity of natural gas proposed to be exported by Pacific NorthWest, for a term of 40 years, is surplus to Canadian needs. The Board 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 in this Application, and a plausible potential increase in demand.

In aggregate, the LNG export licence applications submitted to the Board to date represent a significant volume of LNG exports from Canada. However, all of these LNG ventures are competing for a limited global market and face numerous development and construction challenges. 

Consistent with the evidence submitted in Pacific NorthWest’s Application, the Board believes that not all LNG export licences issued by the Board will be used or used to the full allowance. 

The Board also evaluates each application based on the merit of its own evidence.

The terms of the licence state that it shall commence on the first export and shall continue for a period of 40 years thereafter. 

The licence shall expire ten years from the date of the Governor in Council approval of the Licence, unless exports of LNG have commenced on or before that date, or the Board otherwise directs.

The complete Decision from the NEB can be examined here.

The National Energy Board has provided a number of extensions to original export licences across Canada in recent months.

Also of note for the North Coast was a decision released in August, when Exxon-Mobil/Imperial Oil received a fifteen year extension to their original 25 year LNG export licence, giving that energy giant a 40 year window towards its plans for a shipment terminal at Tuck inlet.

And while the NEB is making the prospect of development as smooth as possible for would be proponents. It should be noted that none of the proposed LNG projects for the Northwest have moved towards a Final Decision as of yet and a number of the high profile projects have been delayed or put on the shelf for the foreseeable future.

In late September, Pacific NorthWest received Federal approval for its proposed Lelu Island development, but with 190 of conditions that must be met.

Petronas the parent company of Pacific NorthWest recently announced their plans to conduct complete overview of their project now that the approval has been granted.

More items related to the Pacific NorthWest LNG project can be found on our archive page here.

While a larger overview of the LNG picture in the Northwest can be found here.

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