KM LNG | Northwest Coast Energy News

More pipeline debate coming to the Northwest: Changes to the Pacific Trails natural gas Pipeline

Pacific Trail Pipelines map — The Pacific Trails Pipeline map as of Feb. 2012. (PTP/BCEAO)

Another pipeline debate is about to open in the northwest. This time for changes to the Pacific Trails (natural gas) Pipeline, that will run from Summit Lake, just outside Prince George, to Kitimat.

Public information meetings will be held in Terrace, Houston, Burns Lake and Vanderhoof in the next couple of weeks.

The PTP runs entirely within British Columbia, and so comes under the jurisdiction of the Environmental Assessment Office of British Columbia. The application to build the PTP was filed in 2005 and approved in 2008 which means the process for the amendments will go much faster than the current Northern Gateway Joint Review hearings for the Enbridge twin bitumen/condenseate pipeline which are expected to last at least another eighteen months.

Pacific Trails is asking to

Change the location of the compressor station;
Establish two new temporary stockpile sites;
Make pipeline route modifications

The period for commenting on the Pacific Trails Pipeline amendments opens on February 27 and closes March 28. The public meeting on the changes to the compressor station were held in Summit Lake last September.

The documents filed with the BCEAO say that Pacific Trails Pipelines is in ongoing negotiations with First Nations where the PTP will cross their traditional territory.

The natural gas project has general support in northwestern BC, and the relations between First Nations and PTP, and Apache, the main backer of the Kitimat LNG project are much better than those with Enbridge. (The PTP would supply the liquified natural gas terminals in Kitimat)

Significantly, the documents show that the PTP is trying to enter separate negotiations with the Wet’suwet’en houses that are now objecting to the pipeline route through their traditional territory.

The filing says:

In addition, PTP is now consulting, or making all reasonable efforts to consult, with one of the 13 Wet’suwet’en Houses as a discrete entity. PTP was informed in February 2011 that Chief Knedebeas’s House, the Dark House, was no longer part of the Office of the Wet’suwet’en although the latter still maintains responsibility for the welfare of all Wet’suwet’en lands and resources. Consultation that took place prior to this year with the Office of the Wet’suwet’en included consultation with the Dark House. PTP has been diligent in seeking to consult with the Dark House since April 2011. The spokesperson for Chief Knedebeas of the Dark House, Freda Huson, states that she also represents a group called Unist’ot’en.

But it’s Enbridge that is the sticking point, and could bring controversy to this amendment request. The Wet’suwet’en houses that blockaded a PTP survey crew last fall said they were worried that the Northern Gateway pipeline follows roughly the same route as the PTP. The PTP application was filed and approved long before the controversy over the Enbridge Northern Gateway began to heat up.

One reason is that original approval was for a pipeline to import natural gas before the shale gas boom changed the energy industry. As PTP says in the application to change the compressor station.

When the original purpose of the PTP Project was to transport natural gas from an LNG import facility at Kitimat to the Spectra Energy Transmission pipeline facilities at Summit Lake, the design called for the installation of a mid-point compressor station to enable the required throughput of natural gas. This compressor station was sited at the hydraulic mid-point of the pipeline. The location of the compressor station in 2007 was south of Burns Lake and just east of Highway 35.

Now that the PTP Project is designed to move natural gas from Summit Lake to Kitimat, or east to west, a compressor station is required at Summit Lake rather than at the hydraulic mid-point of the pipeline. The new Summit Lake compressor station is required in order to increase the pressure of the natural gas from where it is sourced at the Spectra Energy Transmission pipeline facilities.

The EAO will hold open house meetings on the pipeline route changes from 4 pm to 8 pm at each location at

Monday, February 27, 2012
Nechako Senior Friendship Centre, 219
Victoria Street East
Vanderhoof, BC

Tuesday, February 28, 2012
Island Gospel Gymnasium
810 Highway #35
Burns Lake, BC

Wednesday, February 29, 2012
Houston Senior Centre
3250 – 14th Street W
Houston, BC

Thursday, March 1, 2012
Best Western Plus Terrace Inn
4553 Greig Avenue
Terrace, BC

The EAO says: Displays containing information on the proposed amendments will be available for public viewing. The EAO will be available to answer questions on the amendment process. The Proponent will be available to answer questions on the Project and proposed amendments.

The documents show there are route changes to the pipeline route along the Kitimat River, but those are considered “minor route adjustments” so no meetings are planned for Kitimat.

Documents

PTP meeting schedule

Complete filing documents from PTP are available on the BCEAO site here.

Pacific Trails Pipeline

Apache waiting for sales deals before final green light for Kitimat LNG

There was no announcement of a green light for the Kitimat LNG project in today’s conference call by Apache Corp. with market anaylsts and journalists.

Apache CEO G. Steven Farris told the call that negotiations with overseas (likely Asian) buyers are at an advanced stage.

“Frankly we’re somewhat past the polite introductions and that kind of stuff with respect to buyers,” he said. “We’re now in the throes of actual negotiations.”

While Apache has yet to commit to building the $5-billion plant at Bish Cove, south of Kitimat, construction work has continued all winter at the site.

Market analysts still expect Apache and its partners in KMLNG, Encana and EOG, to give the go ahead sometime in the first quarter of 2012.

In a news release issued before the call, Farris, said “Apache’s balanced portfolio and returns focus fueled an outstanding year in 2011, setting records for production, earnings, revenues, proved reserves and cash flow.”
The release went on to say:

In the fourth quarter, earnings totaled $1.2 billion or $2.98 per diluted share, up from $670 million or $1.77 per share in the prior-year period. Production totaled 759,000 boe per day, up 4 percent from the year-earlier quarter, and cash from operations before changes in operating assets and liabilities* totaled $2.7 billion, up from $2 billion in the year-earlier period. Apache reported fourth-quarter adjusted earnings* of $1.2 billion or $2.94 per share.

Apache’s oil and natural gas liquids production was 50 percent of total volume in 2011 but contributed nearly 80 percent of revenues because of the wide gap between global crude oil and North American natural gas prices. Apache’s results also benefited from the price differentials between oil prices in basins linked to the West Texas Intermediate benchmark and higher prices for oil produced in the Gulf of Mexico, Egypt, Australia and the North Sea that represents approximately 76 percent of its crude production.

Apache ended 2011 with proved reserves of 3 billion boe, up 1 percent from 2010. Apache’s 2011 production was 273 million boe (MMboe). The company added 422 MMboe, or 155 percent of production, through extensions, discoveries and acquisitions. Divestitures and revisions totaled 113 MMboe. Apache spent $9.1 billion on exploration, development and acquisitions capital, excluding asset retirement obligations and capitalized interest.*

During 2011, with the continued downward pressure on North American natural gas prices, Apache transitioned its North American drilling program to oily and liquids-rich targets in the Permian and Anadarko basins, the Gulf of Mexico and Canada.

Apache, Shell mark LNG progress at District of Kitimat council

Eurocan site at Kitimat — Apache will build the work camp for the Kitimat LNG project at the old Eurocan site. (Robin Rowland/Northwest Coast Energy News)

As the financial and energy markets speculated Monday, Feb. 6, 2012 that Apache Corporation would make an official announcement during its quarterly webcast next week that the Kitimat LNG project will go ahead, a company report to the District of Kitimat Council, released this evening, is a strong indication that the project is a go.

Mayor Joanne Monaghan told the council that Apache has reported to the district that work at the site for the LNG terminal at Bish Cove has been “progressing well” through the winter and was now “progressing toward the construction phase.” Work so far at Bish Cove includes site preparation, building an access road and a temporary dock for the crew boat.

Monaghan said that Apache will begin work on a work camp for the Kitimat LNG project at the old Eurocan site “shortly.”

Monaghan also that the province of British Columbia told her that it estimates that there will be 800 permanent, long term jobs in British Columbia over the life of the projects 9,000 construction jobs over the 10 to 15 year multi-train (phase) plans from the KM LNG, BC LNG and Shell projects. Premier Christy Clark estimated that LNG projects will bring the province $1 billion in revenue. (For Premier Christy Clark’s statement see Vancouver Province Liberals shift strategy to LNG)

The mayor said that Apache plans to work closely with local contractors in general contracting, supplies, concrete supply, logging and land clearing and other supporting jobs.

Apache will be in competition with Rio Tinto Alcan for the local workforce and contractors. Last Thursday, RTA, which is working on a $3 billion modernization project at the Kitimat aluminum smelter, stole a march on Apache, by holding a day long conference for contractors and suppliers across British Columbia, including a tour of the plant, so they could bid on work during that project.

At the same meeting, district council was told that Shell has begun the official transition in its takeover the old Methanex site, which it recently purchased from Cenovus by applying for a licence of occupation at the site, which included asking for permission under district of bylaws to put a Shell Canada sign at the entrance to the site, replacing the current Methanex sign. The old Methanex site will be the base for Shell’s plans for its LNG project.

(This story has been updated and corrected after checking Christy Clark’s statement on LNG which at the council meeting was attributed, in part, to Apache)

CIBC analyst speculates on one big natural gas pipeline to Kitimat as rumours persist that Apache decision on KM LNG will come next week

There is increasing speculation in the financial and energy markets that Apache Corporation, the lead investor in KM LNG partners, who propose to build the Kitimat LNG project will announce the investment decision next week. If the decision is positive, and it is expected to be positive, that means the work underway at the Bish Cove site will ramp up to full construction.

The speculation is heightened by the fact that the two other partners in KM LNG, Encana and EOG, report the following morning. Rumours on the Kitimat announcement began after Encana delayed its announcement by a week from its normal time in early February. (At that time one energy market analyst who follows NWCEN on Twitter contacted this site to ask if there were rumours here. At that time, there were none)

Apache has scheduled a fourth quarter report conference call and webcast from its headquarters in Houston, Texas, Feb. 16, 2012, at 1 pm Central Time.

Apache has always said that the go/no-go decision on the Kitimat project would come in the first quarter of 2012.

The market speculation, however, may not be entirely good news. That’s because this morning, Andrew Potter, of CIBC World Markets, told a conference call that the rush to export liquified natural gas from northeastern BC and Alberta to Kitimat would mean building one or two large natural gas pipelines, instead of several small ones, to reach the terminal projects.

Reuters quoted Potter as saying: “There is no logic at all to seeing three to five facilities built with three to five independent pipelines,” he said.

At the moment, the just approved BC LNG project, a cooperative of 13 energy companies, plans to utilize the existing Pacific Northern Gas facilities which already serve northwestern British Columbia. The PNG pipeline roughly follows the communities it serves along Highway 16. KM LNG is in partnership with the Pacific Trails Pipeline project, which would take that pipeline across country.

The third LNG project, by Shell, is still in the planning stages, but it, too, would need pipeline capacity.

Although there is general support for the LNG projects in northwestern BC, and less controversy over natural gas pipelines, last fall, members of one Wet’suwet’en First Nation house blocked a survey crew for Apache and Pacific Trail Pipelines who were working near Smithers on that house’s traditional territory. The survey project was then stood down for the winter.

The fear among some First Nations leaders and environmentalists is that the Pacific Trails Pipeline could, intentionally or unintentionally, open the door to much more controversial Enbridge Northern Gateway bitumen pipeline, since the PTP and Northern Gateway could follow the same cross country route.

Whether or not Potter intended to stir up a hornet’s nest, he likely has. What appears to be logical and economic for a CIBC analyst in a glass and steel tower, one or two giant natural gas pipelines, is now likely going to be fed in to, so to speak, and amplify the controversy over the Northern Gateway pipeline.

Potter also told the conference call that together the natural gas projects do not have enough gas in the ground to support the export plans. That means, Potter said, more acquisitions and joint venture deals in the natural gas export sector. Bob Brackett of Bernstein Research, quoted by Alberta Oil magazine, also says there will likely be consolidation of Kitimat LNG projects, since there was similar consolidation in Australia.

Apache Corp. Fourth quarter reporter webcast page.

PNG System map — The existing Pacific Northern Gas Pipeline follows Highway 16 (PNG)

The Pacific Trails Pipeline (yellow and black) would go cross country to Kitimat. The existing PNG pipeline, seen in the above map, is marked in red on this map. (PTP)

The Northern Gateway Pipeline also goes cross country, on a similar route to the proposed Pacific Trails Pipeline. (Enbridge)

PetroChina looks to Kitimat as it spends $1 billion for Shell shale gas in northeastern BC

PetroChina has bought a 20 per cent stake in Shell Canada’s Groundbirch shale-gas project in north eastern BC, leading to media reports that PetroChina is also investing in Shell’s planned Kitimat liquified natural gas export terminal in Kitimat.

The Groundbirch “play” in the northeastern BC shale gas fields produces 180 million cubic feet of gas a day form 250 wells.

A Hong Kong website, FinanceAsia, reported that PetroChina is paying $1 billion for the stake in the northeast BC shale gas operation.

China Daily confirmed the story, quoting Mao Zefeng, the Beijing-based spokesman of PetroChina, who declined to give the value of the transaction.

China Daily said Shell and PetroChina’s parent agreed in June to increase cooperation in energy exploration in China, estimated to hold the world’s largest reserves of shale gas. The semi-official newspaper says Petro China is looking to Canada to obtain drilling technology and expertise.

“It’s a continuation of our cooperation in China, and we can learn about shale-gas exploration and production by being a partner in the Canadian shale-gas project,” Mao said. “The project will also bring us good investment returns.”

Barron’s also reported that China is looking to get more experience shale gas, quoting Benchmark analyst Mark Gilman who told Dow Jones Newswires. “They are trying to learn about this business, on the basis of their belief that it will better position them to assess and develop similar resources within China,” he said. In fact, Shell and PetroChina are exploring for shale together in China, so the Canadian deal may be a “quid pro quo” gesture to Shell, he added.

Shell executives said at a meeting in London on Thursday that the company has invested $400 million in shale gas exploration in China, funding 15 wells with more in the future.

Last fall, Shell purchased the old Methanex site and the Methanex marine terminal in Kitimat.

Both The Globe and Mail and Postmedia News are tying the investment directly to Shell’s Kitimat LNG export project.

The Globe and Mail says that PetroChina as well as Japan’s Mitsubishi and Korean Gas are stakeholders in the Shell Kitimat LNG project.

PetroChina’s had agreed with Encana, a partner in the KM LNG project to invest $5.4-billion in the company’s shale gas operations in British Columbia. That deal collapsed last fall after the two companies could not agree on finances.

PetroChina is also a heavy investor in the Alberta bitumen sands.

The deal between PetroChina and Shell came on the same day that National Energy Board approved the BC LNG project, the second one to be proposed for Kitimat. The first, approved in October, is the Kitimat LNG project owned by the KM LNG partnership.

It also comes a few days before Prime Minister Stephen Harper begins an official visit to China.

NEB approves BC LNG, second Kitimat LNG project

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.

BC LNG Map — Map showing the BC LNG site in Kitimat harbour (NEB)

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

BC LNG pipeline map — Map of pipelines that will feed the BC LNG project (NEB)

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.

Editorial: Just asking: why didn’t anyone object to the Americans at the NEB LNG hearings in Kitimat?

The Joint Review Panel hearings on the Northern Gateway pipeline are less than 48 hours from now. The media are packing their bags and coming to Kitimat (or perhaps Terrace since this town is booked solid).

The propaganda war, and it can only be called a propaganda war, is in full force, driven mostly by right wing columnist Ezra Levant and his Ethical Oil organization, objecting to “foreign intervenors in the pipeline hearings at another site OurDecision.ca

This now seems to have widespread support, in a Twitter debate last night, many even moderate conservatives and even moderate Albertans were saying there is too much foreign influence in the JRP hearings.

I have one question for these people. Where were you in June? On a beach?

It was in June that the National Energy Board held hearings on the first of the three proposed Liquified Natural Gas projects in Kitimat. No media hordes descended on Kitimat. At those hearings only local reporters showed up and I was the only one that stuck through the entire proceedings. (The NEB did approve the export application)

So when the media quote Levant and his spokesperson Kathryn Marshall, the widespread stories about this malevolent foreign influence are inaccurate because they weren’t in Kitimat in June so they didn’t hear all those deep Texas drawls in the hearing room at the Riverlodge Recreation Centre.

Although a lot of good reporters are coming into town this week, they’ll all be gone by Thursday morning when the JRP hearings move on to Terrace.

So in today’s Sun Media papers Levant says:

Who should decide whether Canada should build an oil pipeline to our west coast — Canadian citizens or foreign interests?
That’s what the fight over the Northern Gateway pipeline is about. Sure, it’s also about $20 billion a year for the Canadian economy and thousands of jobs. It’s about opening up export markets in Asia. It’s about enough new tax dollars to pay for countless hospitals and schools.
But it’s really about Canadian sovereignty. Do we get to make our own national decisions, or will we let foreign interests interfere?
The answer should be obvious to any self-respecting Canadian: This is a Canadian matter, and Canadians should decide it.

Why weren’t Levant and the rest of the blue-eyed sheikh crowd (OK they don’t all have blue yes but you know what I mean) across the Rockies here in June objecting to those Americans interfering in Canadian affairs with their plans to export liquefied natural gas to Asia?

Who is behind the Kitimat LNG project? Well, the KMLNG partners are Houston, Texas based Apache Corporation, Houston, Texas based EOG Resources and Encana, a company that originated in Canada but now has extensive operations in the United States and around the world.

The second LNG project, which is now before the National Energy Board, is BC LNG, a partnership between a Houston, Texas-based energy company and the Haisla First Nation here in Kitimat.

The third LNG project is coming from energy giant Royal Dutch Shell.

When are we going to see Ethical Oil and all those conservative columnists objecting to American participation when the NEB holds hearings on the second and third LNG projects?

This goes all the way to the centre of power. Stephen Harper objects to the Northern Gateway hearings being “hijacked by foreign money.” I notice the Prime Minister didn’t object to the hearings in June with American companies Apache and EOG investing in a natural gas pipeline. Cabinet ministers Joe Oliver and Peter Kent are also concerned about foreign influence on pipeline projects. That is they are only worried about possible foreign influence when it comes to the environment. Foreign influences that are building natural gas pipelines and LNG terminal facilities are perfectly fine, thank you.

Blaming “foreign influence”, of course, is one of the oldest dirty tricks in the political playbook. In recent days Russian Prime Minister Vladimir Putin has blamed foreign influence for the demonstrations against the rigged election in that country. In Syria, Bashir al-Assad is still blaming “foreign agitators” for the revolt against his regime. Before they were ousted, both Hosni Mubarak of Egypt and Mohamar Gaddafi of Libya blamed “foreign agitators” for the Arab Spring. Go to Google News and type in “foreign influence” or “foreign agitators” and now that Google News also searches news archives, you can find stories of politicians all over the world blaming foreigners for their troubles going back to the turn of the last century.

It’s just sad to see Canada’s leading politicians and the major media joining that sorry tradition.

Note Natural Gas is not bitumen

Some in the media seems to be puzzled that most of the people in northern British Columbia are not objecting to the liquified natural gas projects. The media seem puzzled that KM LNG has been able to reach agreements with First Nations along the natural gas pipeline routes when Enbridge can’t.

(One factor is that Enbridge got off on the wrong foot with First Nations and things have generally gone downhill from there, leading people in northwest BC to question the general competence of Enbridge management.)

The answer is that natural gas is not bitumen. Natural gas is known factor. Bitumen, despite the thousands of pages of documents field by Enbridge with the JRP, is an unknown factor since there has never been a major bitumen disaster.

The worst case scenario, a catastrophic LNG ship explosion, could cause a huge forest fire. A natural gas pipeline breach under the right conditions could start a big forest fire. The environment of northwestern British Columbia has evolved to deal with fires. After such an incident, nature would take over and the forest would eventually come back. It is likely that the forest would take longer to recover than it would from a lightning strike fire, but the forest would recover. Bitumen leaking into salmon spawning rivers would kill the rivers. Bitumen stuck at the deep and rocky bottom of Douglas Channel would contaminate the region, probably for centuries.

It’s that simple.

Related Terrace Daily No Apology Forthcoming by Gerald Amos

NEB approves KM LNG export licence

Energy

The National Energy Board has approved KM LNG’s (also known as Kitimat LNG) application for an natural gas export licence.

A NEB news release says:

The National Energy Board (NEB or the Board) today approved an application by KM LNG Operating General Partnership (KM LNG) for a licence to export liquefied natural gas (LNG) from Kitimat, British Columbia to markets in the Asia Pacific region.

The export licence authorizes 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 be sourced 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.

The construction and operation of the pipeline and the terminal will require provincial regulatory decisions.

This is the first application for an LNG export licence that the Board has considered since the de-regulation of the natural gas market in 1985.

In approving the application, the Board satisfied itself that the quantity of gas to be exported does not exceed the amount required to meet foreseeable Canadian demand. The exported LNG will not only open new markets for Canadian gas production, but the Board believes that ongoing development of shale gas resources will ultimately further increase the availability of natural gas for Canadians.

Prior to approving the licence, the Board considered environmental and related socio-economic effects of KM LNG’s application. These effects included matters related to marine shipping, and the proposed LNG terminal and Pacific Trail Pipeline.

The Board also acknowledges the potential economic benefits associated with KM LNG’s project. These benefits include employment opportunities due to the development of the LNG terminal and the Pacific Trail pipeline.

Kitimat mayor Joanne Monaghan said, “I am glad they got it, because now the project can move forward.”

KM LNG is owned by Apache Canada Ltd. (40 per cent), EOG Resources Canada Inc. (20 per cent) and Encana Corp. (20 pre cent). The Front End Engineering for the LNG terminal at Bish Cove is now underway. The companies say a final investment decision will be made in early 2012.

A news release from Apache said:

“The Kitimat LNG project represents a remarkable opportunity to open up Asia-Pacific markets to Canadian natural gas and we’re leading the way in being able to deliver a long-term, stable and secure supply to the region,” said Janine McArdle, Kitimat LNG President. “This export licence approval is another major milestone for Kitimat LNG as we move forward and market our LNG supply. LNG customers can have even more confidence in a new source of supply.”

“Today marks a historic day for Canada’s natural gas industry and this is fantastic news for our project and the communities where we operate. Kitimat LNG will bring revenues and jobs and the associated benefits to Canada,” said Tim Wall, Apache Canada President. “The Kitimat LNG partners are very pleased with the NEB’s approval of our export licence and we’d like to thank them for their support and confidence in the project.”

Text of NEB Decision on KM LNG(pdf)