The National Energy Board has approved a 20-year-export licence for Kitimat’s second LNG project, known as BC LNG. A NEB news release says:
The export licence authorizes BC LNG to export 36 million tonnes of LNG, which is equivalent to approximately 47.9 billion m³ of natural gas, over a 20 year period.
The maximum annual quantity allowed for export will be 1.8 million tonnes of LNG, which amounts to approximately 2.4 billion m³of natural gas.
A co-operative comprised of natural gas producers, marketers and LNG buyers is a central feature of BC LNG’s export proposal, where members of the co-operative will submit bids to provide natural gas to be liquefied or purchase LNG.
A committee will review the bids and choose those that will yield the greatest margin to the co-operative. Membership in the co-operative is currently comprised of thirteen parties, and additional members may join upon request.
BC LNG’s export model permits smaller natural gas market participants in Canada to play a part in exporting LNG. In approving BC LNG’s application, the Board satisfied itself that the quantity of gas to be exported is in excess of the requirements to meet the foreseeable Canadian demand.
The Board also determined that the volumes of natural gas proposed to be exported are not likely to cause Canadians difficulty in meeting their energy requirements at fair market prices.
The Board acknowledged the potential economic benefits associated with BC LNG’s project. In particular, the Board noted the benefits for the Haisla Nation, including an interest in BC LNG, and employment opportunities resulting from the development and operation of the liquefaction facility.
The Haisla Nation has a 50 per cent stake in the project through the Hasila Nation Douglas Channel Limited Partnership.
The NEB says the Haisla say the new revenue source would allow the First Nation to support health, education, community development and the many other needs of the First Nation and its members. The Haisla say that business and
employment opportunities associated with the development of the LNG terminal and associated
facilities would be available for Haisla members and businesses.
The NEB also says that the Haisla indicated
that a number of other Aboriginal persons, businesses and nations would see economic spinoff benefits from the development.
The NEB decision says there will be two “liquefaction trains” on barges in Kitimat harbour. The
first train is scheduled to commence in 2013-14 and the second train in 2016-18. Each train will
have a daily volume requirement of 3.5 million cubic metres a day (125 MMcf/d) of natural gas. After completion of both trains, the terminal will have an annual liquefaction capacity of 1.8 million tonnes of LNG.
LNG from the Terminal will be pumped directly into an LNG tanker berthed adjacent to the barge. It will take about 30 days to fill a typical LNG tanker and approximately 25 days to make the roundtrip between Kitimat and markets in Asia.
Talisman Energy Inc. and Tenaska Marketing Canada both have a stake in the project.
The NEB approved the first project, known as Kitimat LNG, operated by the KM LNG partnership on October 13, 2011.
That export licence authorized KM LNG to export 200 million tonnes of LNG (equivalent to
approximately 265 million 10³m³ or 9,360 Bcf of natural gas) over a 20 year period. The maximum annual quantity allowed for export will be 10 million tonnes of LNG (equivalent to approximately 13 million 10³m³ or 468 Bcf of natural gas). The supply of gas will come from producers located in the Western Canada Sedimentary Basin. Once the natural gas has reached Kitimat by way of the Pacific Trail Pipeline, the gas would then be liquefied at a terminal to be built in Bish Cove, near the Port of Kitimat.
A third LNG project by Shell Canada, which will use the old Methanex site in Kitimat and the old Methanex marine terminal in Kitimat harbour is currently in the preliminary planning stages.
The NEB hearings on the LNG projects are different from the current Joint Review Panel hearings on the Enbridge Northern Gateway Pipeline. The JRP hearings are a “facility hearing” and cover the entire project, including environmental impacts. Since neither LNG project actually crosses a provincial boundary, the NEB’s jurisdiction is limited to granting the export licence.