LNG Canada today short listed two companies, LNG BC Contractors, a partnership of TechnipFMC plc and KBR, Inc. and the partnership of JGC Corporation and Fluor Corporation on the short list to build the proposed LNG Canada facility in Kitimat.
LNG Canada said their commercial negotiations to commence immediately
LNG Canada news release:
Vancouver, British Columbia, February 2, 2018 – Following a year-long request for proposal (RFP) process, LNG Canada announced it has notified two of its four potential engineering, procurement and construction (EPC) contractors that they have been shortlisted for the chance to build the company’s proposed LNG export facility in Kitimat, British Columbia.
LNG Canada intends to select the preferred EPC contractor sometime in 2018. Negotiations will begin immediately with the two EPC contractors to determine the most commercially competitive proposal.
LNG Canada identified the finalists as the partnership of TechnipFMC plc and KBR, Inc. (LNG BC Contractors), and the partnership of JGC Corporation and Fluor Corporation.
Following a decision to delay a final investment decision in 2016, LNG Canada used the delay period to issue an RFP to identify a preferred EPC contractor willing to build the proposed LNG Canada project on a lump sum basis. LNG Canada prequalified four EPC consortia based on several criteria, including prior experience in LNG design and modularization, track record of project completion, and experience with construction in Western Canada.
“This process is critical in LNG Canada’s pursuit of the level of competitiveness required to support a future final investment decision by our joint venture participants,” said Andy Calitz, CEO of LNG Canada. “A tremendous amount of time and effort has been invested by the four EPC consortia, as well as by LNG Canada’s internal review team, and I thank them all for their contributions to the RFP process thus far.”
LNG Canada’s proposal evaluation criteria included health and safety management, financial strength, technical design, execution plans, contract price and schedule. The proposers also committed to living up to LNG Canada’s values and the commitments it has made to local communities, First Nations, as well as the company’s high standards of social and environmental performance.
“While this is a significant milestone, work remains to be done to deliver a globally cost competitive project that is well positioned to take a final investment decision,” added Calitz. “We look forward to working closely with TechnipFMC plc and KBR, Inc. and JGC Corporation and Fluor Corporation to advance our project in British Columbia that will benefit the regional, provincial and national economy.”
LNG Canada says the Kitimat liquified natural gas project “has been delayed and not cancelled” with a Final Investment Decision possible in the next 18 to 24 months, Director of External Relations Susannah Pierce told a company sponsored community pizza party at Riverlodge on Tuesday October 18, 2016.
She paid tribute to the support for the project from Kitimat and the Haisla Nation, saying, “Thanks to you we were very close to have our shareholders take the Final Investment Decision in the New Year,” but she then added, “You also know there were some things we couldn’t control like the state of the marketplace.”
Pierce used the analogy of someone saving up to buy a car and believing that they have enough money in the bank and then the conditions change. “That is what happened to us,” she said. “You still want the car, but you just have to wait a little longer.”
Pierce said that the current program of site preparation will pause for the winter and holidays in mid-December. After that “work will begin to wind down over the next few months and then we will preserve the site until we are ready to make the Final Investment Decision.” She said LNG Canada is studying ways to make site preservation cost effective.
“We are doing everything we can to keep our pencils sharp and keep the community informed so that when the project is approved we are ready,” she added.
She pointed out that LNG Canada has already built a fisheries habitat offset in preparation for full development of the site.
LNG Canada and its partner shareholders are keeping a close eye on the developments of the natural gas market in Asia and Pierce said, “We do expect to be sending LNG to the Asian market in the next decade, so 2023 and beyond is what we’re talking about.”
She said that the Final Investment Decision when it comes will bring opportunities for Kitimat, the province and the whole country.
“Everyone in this room and everyone at LNG Canada is working to make this project real,” Pierce said.
“For those who are staying with us, we’re here, we’re not going anywhere and we’re going to be available to the community for an number of events. Let’s make it happen. We do have a shot at making it real but it may not happen as soon as you’d like it.”
Monday’s decision by LNG Canada to postpone the all-important Final Investment Decision for the Kitimat liguified natural gas project came as a momentary shock—but no real surprise. After the Brexit vote, you could see the hold button blinking from across the Atlantic.
Andy Calitz CEO of LNG Canada and a long time, experienced, executive with the lead partner, Royal Dutch Shell blamed the current market conditions for natural gas in both a news release and an investors’ conference call. However, the turmoil in the world economy brought about by Britain’s (largely unexpected) vote to leave the European Union made the postponement inevitable.
Immediately after the vote on June 23, when the now not so United Kingdom voted by 52 per cent to 48 per cent, to leave the European Union, financial analysts predicted that given the uncertainty, companies based in the United Kingdom would immediately begin to adjust their long term planning.
The stock market has stabilized and reached new highs, at least for now, but the British pound remains weak.
Most important, according to reports in the business press around the world, many long term projects by companies not only in the UK but everywhere are being re-examined, postponed or cancelled. All due to the long term uncertainty in world markets.
Even without Brexit, the situation with long term planning for the natural gas market is complicated, as LNG Canada’s External Affairs Director Susannah Pierce explained in this interview on CKNW ‘s Jon McComb show. ( It is an informative interview. Autoplays on opening the page)
“ Postpone investment decisions”
Royal Dutch Shell is one of the world’s largest corporations. It is based in the United Kingdom although its corporate headquarters are in the Netherlands (also a member of the European Union).
From June 24 to July 11 was just enough time for the bean counters and forecasters in London, Vancouver, Calgary, Tokyo and Beijing to crunch the numbers and decide that the prudent move would be to put the LNG Canada project on hold.
Rio Tinto is also a dual national company, listed on both the London and Australian stock exchanges and with its headquarters in London. (More about Rio Tinto later.)
Although both Shell and Rio Tinto are giant transnationals with operations worldwide, the turmoil in the United Kingdom, in the corridors and cubicles of the home offices, is having a psychological and personal, as well as professional, impact, meaning more of the work in those towers of London will be focused on Brexit.
The decision doesn’t mean that the LNG Canada Final Investment Decision will be on hold forever. Of all the world’s energy companies, Shell is one of the oldest and it has a solid reputation for better long term planning than some of its competitors.
In the news release, Calitz noted
I can’t say enough about how valuable this support has been and how important it will be as we look at a range of options to move the project forward towards a positive FID by the Joint Venture participants.
The news release goes on to say
However, in the context of global industry challenges, including capital constraints, the LNG Canada Joint Venture participants have determined they need more time prior to taking a final investment decision. decision.
How much time? Well, as Theresa May became the Prime Minister of Great Britain, the New York Times noted, like other media, that investment decisions are on hold:
Ms. May does not plan to depart the union quickly because it could put Britain’s negotiators under pressure, and at a disadvantage…
And the longer Britain drifts, the greater the uncertainty for businesses that could postpone investment decisions until things are clearer, potentially pushing the nation into a recession.
The extrication of Britain from Europe will likely be more in the character of the Greek financial collapse, a seemingly endless process where each event and each piece of news has the power to set off a new round of financial fears.
And like the Greek crisis, each piece of bad news will compound fears in markets that were nervous for other reasons.
So once (and when) Theresa May invokes Article 50 that opens a two year window for Britain to leave the European Union, starting negotiations for Brexit. Then it gets complicated, if Scotland votes to leave the United Kingdom or if Northern Ireland also demands a dual referendum in both the Republic and the North on a united Ireland (as permitted under the Good Friday Peace Agreement).
Although May says she will continue to the UK`s next fixed date election, what if May calls a snap general election, with an uncertain outcome, perhaps another minority government, with seats split among several parties, including those who advocate remaining in the EU?
The price of oil is still low compared to a few years ago. That price is expected to remain low with all that the Saudis are pumping to retain market share, the Iranians want to recover from sanctions, and according to Pittis in another column, that means everyone else is pumping as well
The main thrust for Canadian producers is to build more pipelines so they can expand capacity and push ever more of their relatively expensive oil into the world supply chain. If that’s the strategy for high-cost producers, how could anyone think the world’s lower-cost producers wouldn’t be doing the same thing?
There is the glut of natural gas currently in Asian markets and no one knows what Brexit will mean. Unless there’s a drastic change in the marketplace, energy project investment will remain on hold for years to come. (So forget any dreams of a refinery anywhere on the coast. )
Brexit is also going to be a problem for London based Rio Tinto—and for the current negotiations with the Unifor local in Kitimat. Rio Tinto’s bottom line is weak because the price of iron ore, its main source of income, has been dropping. After completing the $4.8 billion Kitimat Modernization Project, Rio Tinto is spending huge amounts of money on its Oyu Tolgoi copper and gold and other minerals mine in Mongolia, a project that many analysts believe could provide up to 60 per cent of Rio Tinto profits as commodity markets recover.
Add to that US presidential election. Donald Trump has threatened to halt imports of both steel and aluminum into the United States if he actually gets to sit in the White House.
Given the flood of steel and aluminum on the global markets, however, it points to the fact that free trade also has to be fair trade.
That means if Hilary Clinton becomes president, she will also be looking at the state of aluminum imports to the United States market.
World conditions are a warning for the Unifor negotiating team in Kitimat. One reason for last year’s prolonged municipal strike was that Unifor spent a good deal of time planning for negotiations with the District but failed to adjust its contract demands when the price of oil unexpectedly collapsed, which meant the District had less money and a lot less flexibility.
In its negotiations with Rio Tinto, Unifor cannot make the same mistake again. There were a handful of unexpected layoffs down at Smeltersite on June 30; there could be more layoffs in the future. Mandatory overtime is a major sticking point—but that overtime demand is coming from the bean counters in Montreal and London, calculating that the overtime costs are, in the long term, less expensive than a lot of new hires.
Media reports show that Rio Tinto is in tough negotiations with its employees around the world. With LNG on hold, disgruntled employees can’t just turn off Haisla Boulevard to the old Methanex site before reaching Rio Tinto’s property line. That means Unifor should be tough but very realistic in its talks with Rio Tinto, knowing that the powers that be that hold the strings in London are more worried about what Brexit will do to the company bottom line than any temporary shutdown of the smelter by a strike.
What does this mean for Kitimat?
So the boom and bust cycle once again moves to bust.
the Haisla nation has been working to get its people jobs in the construction of the facility and related infrastructure, as well as full-time jobs once the plant opens…This was our first chance as Haisla to be a part of the economy, to be part of the wealth distribution in our area. To witness the wealth generation in our territory for the last six years but to not be a part of it, and now to continue to not be a part of it, is really distressing to us, because we had built up our entire future around this.
Mayor Phil Germuth in the same interview said
There’s no doubt that there’s going to be a little bit of hurt for a while, but we still fully believe that Kitimat is by far the absolute best location anywhere on the West Coast [for] a major LNG export facility… We are absolutely confident that it will come.
There’s time in this bust for everyone in town to recover from the hangover of the past few years of the fight over Northern Gateway and the heady hopes of the LNG rush. Demand for natural gas is not going to go away, especially as climate change raises the pressure to eliminate coal, so it is likely that LNG Canada will be revived.
It’s time to seriously consider how to diversify the Valley’s economy, making it less dependent on the commodity cycle. It’s time to stop chasing industrial pipe dreams that promise a few jobs that never appear.
Like it or not, the valley is tied to globalization and decisions made half way around the world impact the Kitimat Valley.
Who knows what will happen in 2020 or 2025 when the next equivalent of a Brexit shocks the world economy?
Suppose, as some here would wish, that all the opposition to tankers and pipelines suddenly disappeared overnight. Does that mean that the projects would then go ahead?
The corporate planners would decide based on their projections for the world economy and the viability of the project for their profit picture. Enbridge was never really able to secure customers for its bitumen. Chevron had no customers for Kitimat LNG. LNG Canada is a partnership, and the partner customers in Asia decided that at this time, the investment is too risky, even if LNG Canada’s longer term prospects are good.
Promoting tourism should now be the priority for Council, for Economic Development, for the Haisla Nation Council, for the local business.
Beyond tourism, it’s time for some innovative thinking to come up with other ideas that would free Kitimat from the commodity cycle. At the moment there are no ideas on the horizon, but unless everyone starts looking for new ideas, practical ideas, the commodity cycle will rule.
The Shell-led LNG Canada project in Kitimat has received a facility permit from the B.C. Oil and Gas Commission (OGC), the company said Tuesday.
A news release from LNG Canada says the permit is one of the key permits required for the construction and operation of the proposed LNG Canada project.
LNG Canada is the first LNG project in British Columbia to receive this permit, which focuses on public and environmental safety, and specifies the requirements the project must comply with when designing, constructing and operating the proposed LNG export facility in Kitimat.
The news release warns “that while today’s announcement is an important step forward for LNG Canada, the project must ensure it is economically viable and meets several other significant milestones including finalizing engineering and cost estimates, supply of labour, and achieving other critical regulatory approvals before making a final investment decision.”
That means that Shell and its partners are still keeping a close eye on factors such as the continuing collapse of the price of oil on world markets, the volatile natural gas market in Asia and the slowdown in the economy in China.
The news release goes on to say:
“We have made excellent progress in the past two years, achieving a number of critical milestones,” said Andy Calitz, CEO of LNG Canada. “Receiving our LNG Facility Permit could not have been achieved without the important input we received from the Haisla Nation and the local community of Kitimat. We continue to progress our project and appreciate the ongoing support from First Nations, the local community and other stakeholders.”
“The OGC identified several conditions that must be met by LNG Canada to design, construct and operate the project,” says Calitz. “We have reviewed these conditions and are confident that we will meet these conditions as they are aligned with LNG Canada’s core safety values and commitment to protect the environment, the community and our workers.”
LNG Canada continues to develop a number of important plans to address public safety and minimize the effects on the environment and local community. For example, LNG Canada is working closely with local emergency response organizations, as well as leading safety experts, in the development of an emergency response framework for the proposed project.
“Safety is our first priority. Safety as it relates to people and the environment is embedded into the design and planning of our proposed facility, and will carry into the construction and operation phases of our project should the project go ahead,” said Andy Calitz.
Social and economic benefits from the LNG Canada project include local employment and procurement opportunities, federal, provincial and municipal government revenue and community investments. Since 2012, LNG Canada has distributed more than $1 million to community initiatives, such as emergency services, trades scholarships and community services. LNG Canada has also contributed more than $1.5 million in programs to build awareness and help provide training for trades careers in all industries, and particularly the emerging LNG industry.
LNG Canada is a joint venture company comprised of Shell Canada Energy (50%), an affiliate of Royal Dutch Shell plc, and affiliates of PetroChina (20%), Korea Gas Corporation (15%) and Mitsubishi Corporation (15%). The joint venture is proposing to build an LNG export facility in Kitimat that initially consists of two LNG processing units referred to as “trains,” each with the capacity to produce 6.5 million tonnes per annum of LNG annually, with an option to expand the project in the future to four trains.
In a news release this afternoon, Pacific Northwest LNG announced that the company has given a positive, but conditional, Final Investment Decision, to build an LNG facility on the environmentally sensitive Lelu Island at Port Edward. BC.
Pacific NorthWest LNG (PNW LNG) announced today that the required technical and commercial components of the project have been satisfied. Consequently, PNW LNG has resolved to move forward with a positive Final Investment Decision, subject to two conditions.
The Final Investment Decision will be confirmed by the partners of PNW LNG once two outstanding foundational conditions have been 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.
“In parallel with work to support the Final Investment Decision, Pacific NorthWest LNG will continue constructive engagement with area First Nations, local communities, stakeholders and regulators,” said Michael Culbert, President of Pacific NorthWest LNG. “The integrated project is poised to create thousands of construction and operational careers in the midst of the current energy sector slowdown.”
Progress Energy Canada and the North Montney Joint Venture partners will continue to invest in its North Montney natural gas resources. The investment to date has proved and probable natural gas reserves of over 20 trillion cubic feet (tcf) with $2 billion-plus invested annually, representing approximately 4,000 sustainable jobs in northeast British Columbia.
“A Final Investment Decision is a crucial step to ensure that the project stays on track to service contracted LNG customers,” Culbert continued. “Pacific NorthWest LNG is poised to make a substantial investment that will benefit Canada for generations to come.”
Although Pacific Northwest LNG is first off the mark with a positive, if conditional, Final Investment Decision, putting a shovel in the ground is not guaranteed. Of all the proposed liquified natural gas projects for northwestern BC, the location on Lelu Island, right at the mouth of the Skeena River, is probably the most environmentally sensitive. Even if the Canadian Environmental Assessment Agency does give its approval, probably with a long list of conditions, it is highly likely the decision will be challenged in court by First Nations and environmental groups.
The environmental process was put on hold in early June after the agency asked Pacific Northwest to provide more information about building the terminal. The island sits near Flora Bank, where young salmon shelter in eel grass after coming down the Skeena, taking time to grow before venturing out into the Pacific. Flora Bank has been called the “nursery” for one of the world’s most important salmon runs.
The fact that Pacific Northwest LNG has to supply more studies means that any final environmental assessment decision will come after October’s federal election.
After initial proposals to dredge the area where met with loud and sustained opposition, Pacific Northwest proposed a suspension bridge and trestle which means the LNG tankers would tie up well off the island in Chatham Sound.
Lelu Island is on the traditional territory of the Lax Kw’alaams First Nation. Members of the First Nation recently voted overwhelmingly against accepting a billion dollars over the life of the project from Pacific Northwest.
Pacific NorthWest LNG filed a report, prepared by engineering and environmental company Stantec Inc., that said there would little or no environmental impact impact from building the $11.4-billion LNG terminal. Stantec’s report, however, is unlikely to reassure many people in the northwest because of Stantec’s close to ties to the energy industry. Stantec did major studies for the controversial Enbridge Northern Gateway project, studies that were challenged by other environmental studies opposing that pipeline project.
Petronas holds 62-per-cent of Pacific NorthWest LNG.
Partners are China’s Sinopec, which holds 10 per cent, Indian Oil Corp. Ltd. which holds 10 per cent, Japan Petroleum Exploration, 10 per cent, China Huadian Corp., 5 per cent and Petroleum Brunei, 3 per cent.
As well some First Nations and environmental groups in the northwest of British Columbia, in the northeast, Blueberry River First Nations who live in the North Montey natural gas region have said they are worried about increased drilling in their traditional territory are concerned about increased drilling by Progress Energy for natural gas within their traditional territory.
The Blueberry River group says it plans request judicial review of the B.C. Natural Gas Development Ministry’s decision to sign the 23-year royalty agreement for the region.
The report mainly concerns the United States, where the race for LNG exports is as fierce as it is in Canada.
“Tens of billions of dollars in capital are targeted for the seven LNG export terminals currently granted licenses by the U.S. Department of Energy (DOE),” said Deepa Poduval, Principal Consultant with Black & Veatch’s management consulting business. “Infrastructure construction, real estate transactions and other services associated with these projects are expected to spur significant levels of economic activity throughout the value chain.”
As far as Canada is concerned, Poduval said, “proposed projects continue to suffer from regulatory and environmental delays, high costs and fiscal uncertainty that have hindered development on all but a couple of frontrunners.”
The report was based on experts surveyed by the company. Respondents were asked to select their expectation of the volume of natural gas that will be exported from the United States and Canada as LNG by 2020.
Nearly 37 percent of respondents said they believed exports would total more than 6 Bcf/d by 2020. In 2013, less than 25 percent of respondents expected exports at this level. In 2014, 60 percent of respondents said they expected LNG exports to be less than 10 Bcf/d by 2020. Less than 7 percent of respondents put the figure at more than 10 Bcf/d.
Poduval said that as less expensive U.S. gas becomes more viable, Asian buyers are increasingly pushing back on higher cost supplies from their suppliers in Asia, Australia and the Middle East, Poduval said.
This pushback is stalling some of the more expensive LNG projects in Canada, Australia and East Africa, with Asian buyers holding back on long-term purchase commitments from these projects in pursuit of more favorable price terms… One of the dangers for U.S. LNG exports continues to be that they could shrink the very price spread that makes them attractive.
Poduval said the first trains at Sabine Pass in Louisiana are expected to go online starting in the fourth quarter of 2015.
Poduval noted the announcement of the 30-year $400 billion agreement for Russia to supply natural gas to China via a new pipeline was considered by some as the “Holy Grail” of international natural gas agreements following stalemated negotiations for more than 10 years between the two countries.
The deal could provide much-needed market diversity for Russia, which exports 80 percent of its natural gas to an increasingly unfriendly Europe that is pursuing other sources of supply. In addition, Russia would potentially supplant some LNG demand from China by supplying about 3.5 Bcf/d of natural gas under this agreement.
Her report also says that an Alaska LNG pipeline project that has been on and off for the past 30 years is now in a pre-FEED (Front End Engineering and Design) stage.
If it goes ahead, the project, which would be the largest in North America, with a capital cost estimate of $45 billion to $65 billion, will bring gas from the North Slope along an 800-mile pipeline to south-central Alaska, where it will be liquefied for shipping to Asian markets.
“But the marketplace continues to be subject to geopolitical events and regional economics,” Poduval said.
Royal Dutch Shell has finally ditched plans for a new $US20 billion-plus liquefied natural gas project in Queensland,making it the latest casualty of the oil price slump.
Global chief executive Ben van Beurden said the proposed greenfield Arrow LNG project with PetroChina was “off the table”, while other ventures would be slowed as priority was given instead to Shell’s North American LNG projects.
“We are prioiritising North America LNG options in that timeframe, LNG Canada and Elba,” he explained, referring to Shell’s LNG export projects in western Canada and the US state of Georgia.
Shell is also a partner in the Woodside Petroleum-led Browse floating LNG project, the Sydney Morning Herald reported. Woodside recently announced it will buy Apache’s stake in the Chevron-led Kitimat LNG project. Shell says:
the timing for starting engineering and design had already been deferred by six months to mid-2015. While the Shell chief executive’s words place some uncertainty whether the oil major wants to proceed in that timeframe, the company has still listed Browse among final investment decision “choices” for the 2015-16 period.
The Douglas Channel project, which contemplates a floating LNG project at the old log sort half way between Kitimat harbour and the Chevron-led Kitimat LNG project at Bish Cove is a now partnership between EXMAR, “an independent Belgium-based company with 35 years’ experience in LNG shipping,” EDF Trading (“EDFT”) a subsidiary and wholesale market operator of Electricite de France S.A., an international energy company with over 39 million customers and AIJVLP, “a limited partnership between AltaGas Ltd. (“AltaGas”) and Idemitsu Kosan Co.,Ltd. (“Idemitsu”). Idemitsu is a Japan-based global leader in the supply of energy and petroleum. AltaGas is the parent company of Pacific Northern Gas which supplies consumers in Kitimat.
The news release says the “Consortium has also executed long-term lease agreements with the Haisla Nation regarding land and water tenure, and with Pacific Northern Gas Ltd. (PNG) for long-term pipeline capacity to supply gas.”
Chevron, the lead corporation in the Kitimat LNG project announced on January 23 that the Moricetown Indian Band had agreed to join the First Nations Limited Partnership, in effect, approving the Pacific Trail Pipeline that would take natural gas to the project in Kitimat.
Here is the news release from all parties involved.
Vancouver, British Columbia, January 23, 2015 – The First Nations Limited Partnership (FNLP) today announced that Moricetown Indian Band (Moricetown) has joined the FNLP. The FNLP is a commercial partnership that, with the addition of Moricetown, now includes all of the 16 First Nations whose traditional territory is located along the proposed 480 kilometre Pacific Trail Pipeline (PTP) route from Summit Lake to Kitimat, B.C.
“The decision of the Moricetown First Nation Band Council to join the First Nations Limited Partnership is one that we warmly welcome,” said the Honourable Bob Rae, Chairman of FNLP.
“It means all 16 First Nations along the proposed Pacific Trail Pipeline route are partners in a unique approach that combines environmental stewardship, extensive job, procurement, and other economic benefits, and direct financial transfers on a regular basis to each First Nations community.”
The FNLP is without precedent in the Canadian energy industry and the Pacific Trail Pipeline is the only proposed natural gas pipeline for a liquefied natural gas (LNG) facility in B.C. with such a benefits agreement. The proposed PTP and Kitimat LNG Facility projects are owned by Chevron and Apache through a 50/50 joint venture and are operated by Chevron.
“This agreement is unparalleled in balancing strong economic growth measures with preserving our cultural heritage and the environment. There is, quite simply, no other deal that comes close to what we’ve been able to achieve in this partnership,” said Chief Dan George of Ts’il Kaz Koh (Burns Lake).
The commercial partnership ensures that FNLP Nations receive immediate and long-term benefits from the PTP project. These include up to $550 million in direct financial benefits over the life of the PTP project, including a recent enhanced benefit of $10 million a year operating life of the PTP project from the Province of British Columbia. The FNLP Nations also receive substantial economic development, skills training, employment and contracting benefits from PTP under the terms of the agreement.
“Chevron Canada wishes to commend all parties for creating a partnership between industry and First Nations based on mutual respect, trust and economic self-determination. We welcome Moricetown as the 16th member of the FNLP, and look forward to building the Pacific Trail Pipeline with First Nations in a manner that places the highest priority on protecting people and the environment,” said Jeff Lehrmann, President, Chevron Canada Limited.
Measures that reflect environmental protection, vitality of traditional cultural values, protection of aboriginal rights and title, economic self-determination and a sustainable future for First Nations are also part of the FNLP agreement. Members of the FNLP have already received significant benefits to date from the agreement, including $17 million in financial payments.
“We have already seen over 1,600 First Nations members receive skills training through the PTP Aboriginal Skills to Employment Partnership, better known as PTP ASEP. Over 900 of these trainees have found jobs,” said Chief Karen Ogen of the Wet’suwet’en First Nation.
First Nations employment currently accounts for 54 per cent of all early works construction workforce hours to date on the Pacific Trail Pipeline. To date, FNLP members have also been awarded over $245 million in PTP construction contracts, and over 65 per cent of construction contract expenditures have been made to member First Nation businesses.
The agreement also facilitates joint ventures between FNLP and companies engaged in the PTP Project. As such, the FNLP Nations not only have a clear financial interest in the pipeline construction but, just as importantly, also have a strong voice in ensuring the preservation of environmental and cultural integrity.
“The FNLP is an innovative model for how industry and First Nations can cooperate effectively with respect to major economic development projects,” said the Honourable Bob Rae.
About First Nations (PTP) Group Limited Partnership (FNLP)
The First Nations (PTP) Group Limited Partnership (FNLP) is a limited partnership of 16 First Nations whose traditional territories are located along the transportation corridor between Summit Lake and Kitimat, British Columbia.
FNLP was formed to secure significant, reliable and long-term economic benefits for its limited partners from the proposed PTP Project.
FNLP member Nations are:
* Haisla Nation
* Kitselas First Nation
* Lax Kw’alaams Band
* Lheidleh T’eneh First Nation
* McLeod Lake Indian Band
* Metlakatla First Nation
* Moricetown Indian Band
* Nadleh Whut’en First Nation
* Nak’azdli Band
* Nee Tahi Buhn Indian Band
* Saik’uz First Nation
* Skin Tyee First Nation
* Stellat’en First Nation
* Ts’il Kaz Koh First Nation (Burns Lake Indian Band)
* West Moberly First Nations
* Wet’suwet’en First Nation
About PTP and the Pacific Trail Pipelines Limited Partnership
The proposed 480-kilometre Pacific Trail Pipeline Project is jointly owned by Chevron Canada Limited (Chevron) and Apache Canada Ltd. (Apache) through the Pacific Trail Pipelines Limited Partnership (PTPLP). The PTP is intended to deliver natural gas from Summit Lake
B.C. to the proposed Kitimat LNG facility on B.C.’s north coast. The Pacific Trail Pipelines Limited Partnership (PTPLP) acquired the project in February 2011 from Pacific Northern Gas.
The fact that the Moricetown Band had held out for so long was seen as one of several factors that was holding up a Final Investment Decision by Chevron and its soon to be new partner, Australia’s Woodside Pretroleum, which is currently finalizing a deal to buy Apache’s stake in the project. Chevron vice chairman, George Kirkland was asked about it during an investor conference call in August, 2014 At the time, Kirkland hinted at the potential problems with the Pacific Trails Pipeline, where there is still a dispute with members of the Wet’suwet’en First Nation. “We’re going to focus on the pipeline and the end of the pipeline corridor. That’s important and we’re putting some money into that to finalize the pipeline routing, get all our clearances and then we’ve got work going on.”
The Unist’ot’en Camp group which opposes energy development in the traditional territory of that House has not yet commented on the announcement. However, earlier Friday at a protest in Winnipeg, Freda Huson, Spokesperson for the Unist’ot’en People and Hereditary Chief Toghestiy of the Likhts´amisyu Clan, issued this statement.
¨The Hereditary Chiefs of the Wet´suwet´en People will stop all attempts from Pipeline Companies, Colonial Governments, and their sell-out employees from bringing Tar Sands Bitumen or Fracked Gas onto our lands. We have ancestral integrity which guides us and will help us ensure that we make the right decisions to protect our lands for all of our unborn generations. We will hold ALL those accountable for attempting to enable destructive agendas to take hold on our sacred lands. We will use our traditional governing systems, the colonial courts, grassroots Indigenous Peoples, and our media savy to make everyone associated with Pipelines, Tar Sands, and Fracking activity from affecting our unceded lands. We are armed with our indomitable spirit and 2 Supreme Court of Canada decisions and will use them against any more aggressors on our unceded lands. Consider this a warning for attempting to trespass on our homelands. We have defended our lands for countless generations and we will stand up like our ancestors have to ensure that we never are viewed as weak in the eyes of our ancestors or children.
The Wet’suwet’en First Nation will receive approximately $2.8 million from the Province at three different stages in the CGL project: $464,000 upon signing the agreement, $1.16 million when pipeline construction begins, and $1.16 million when the pipeline is in service.
The Wet’suwet’en First Nation will also receive a yet-to-be-determined share of $10 million a year in ongoing benefits per pipeline. The ongoing benefits will be available to First Nations along the natural gas pipeline routes. The B.C. government anticipates signing similar agreements with other First Nations in the near future.
Provincial benefit-sharing offers First Nations resources to partner in economic development, complements industry impact benefit agreements that provide jobs and business opportunities, and is a way for government and First Nations to work together to help grow the LNG industry.
John Rustad, Minister of Aboriginal Relations and Reconciliation says in the release, “Too many First Nation communities have been left out of economic growth in B.C. for far too long. It’s exciting to be able to partner with First Nations like the Wet’suwet’en so they can share in the benefits of a new LNG export industry – stronger economies, good-paying jobs and collectively working to establish environmental legacies made possible by LNG development.”
The release quotes Chief Karen Ogen, Wet’suwet’en First Nation, as saying, “Pipeline benefits agreements are just one vehicle driving our participation in LNG development. While these agreements ensure First Nation communities share in the economic benefits of LNG, we are working collaboratively with the Province and other First Nations to ensure environmental priorities are addressed as well.”
The release also quotes Rich Coleman, Minister of Natural Gas Development as saying, “Our government continues to build strong partnerships with First Nations as LNG development gains momentum. Pipeline benefits agreements like this one pave the way for job creation and economic growth as we work together to further the potential of our natural gas sector.”
The news release says the Wet’suwet’en First Nation is among the 15 First Nations located along the Chevron/Apache Pacific Trail Pipeline route that have already signed agreements that will provide $32 million in benefits to First Nations once construction has started.
British Columbia issued an environmental assessment certificate for the proposed CGL project this fall. In addition to meeting conditions set out in the environmental assessment certificate, the project will now require various federal, provincial and local government permits to proceed.
When the certificate was approved in October, the Office of the Wet’suwet’en, which represents hereditary leadership issued a release saying:
B.C. ‘s approval of Coastal GasLink Pipeline project does not mean the project is a go. The Wet’suwet’en still have the right to determine the use of the land and our future.
Not enough information has been made available through the regulatory process to determine environmental impacts nor infringements to Wet’suwet’en rights title and interest.
Current benefits offered by the province and pipeline companies do not take into account the impacts and infringements to our lands, culture and community well-being, for today and into the future.
One group, the Unist’ot’en Camp, representing one house of the Wet’suwet’en continues to camp out in the bush, and the group says they are determined to block any pipeline construction within their traditional territory.
In its news release, BC says, benefits agreements are separate and different than industry impact benefit agreements. Pipeline benefits agreements are made between the Province and First Nations, exclusive of proponents. Impact benefit agreements are made between proponents and First Nations, exclusive of the Province.
The Shell-led LNG Canada project unveiled its commitments to Kitimat at a ceremony at the community information centre at the old Methanex site on October 7, 2014.
LNG Canada has forged the commitments in a sheet of aluminum that is bolted to the wall of the community information centre. Kitimat Mayor Joanne Monaghan unveiled the aluminum sheet, assisted by Kitimat Fire Chief Trent Bossence. Afterward, Susannah Pierce, Director, External Affairs, LNG Canada, signed the sheet, followed by Mayor Mongahan, Chief Bossence, other LNG Canada officials and members of the community.
LNG Canada’s Community Commitments
LNG Canada is proud to outline its commitments to the community, created through a collaborative effort with local residents. In April, June and September 2014, LNG Canada met with the Kitimat community to develop and refine the commitments our company will meet to ensure we are a valued member of the community throughout the lifetime of our project. We are grateful to the many individuals who took part and shared their wisdom and experience.
Our Commitments to the Community
1) LNG Canada respects the importance residents place on companies being trusted members of their community. We aspire to gain this trust by proactively engaging with the community in an honest, open and timely manner; by listening and being responsive and accessible; and by operating in a safe, ethical and trustworthy way.
2) LNG Canada understands that the ongoing well being of the community and the environment are of paramount importance. LNG Canada will consider the health and safety of local residents, employees, and contractors in every decision it makes.
3) LNG Canada recognizes that the environment and natural surroundings are vital to the community. We will be dedicated to working independently and with the community to identify and carry out ways to reduce and mitigate the impact of our facility footprint on the natural surroundings – in the Kitimat Valley, the Kitimat watershed and the Kitimat airshed.
4) LNG Canada is aware of the importance to the community of maintaining and improving access to outdoor recreational opportunities. We will work with the local community to facilitate the creation of new projects that protect or enhance the natural environment and that provide access to the outdoors and the water.
5) LNG Canada recognizes it will be one company among other industrial companies operating in the community. We will work with other local industry leaders to manage and mitigate cumulative social and environmental impacts, and create opportunities to enhance local benefits associated with industrial growth.
6) LNG Canada acknowledges that the commitments we make are for the long term. We will work with the community to develop an environmental, social and health monitoring and mitigation program that meets regulatory requirements and we will share information on the program with the public for the life of our project.
7) LNG Canada understands the need for the community to benefit from our project and values the contributions all members of the community make to the region. We will work with the community to ensure that social and economic benefits from our project are realized and shared locally.
8) LNG Canada acknowledges the importance the community places on our company being an excellent corporate citizen and neighbour that contributes to the community. In addition to providing training, jobs and economic benefits, we will make social investments important to the community to positively impact community needs and priorities.