Northern Gateway announces it will not appeal Appeal Court decision that stopped project approval, will continue “consultations”

 

Northern Gateway pipelines says the company will not appeal the Federal Court of Appeal decision that blocked the approval certificate by the Joint Review Panel and the National Energy Board because there had been insufficient consultation with First Nations.

UPDATE  Vancouver Sun reports Federal government will also not appeal decision

OTTAWA — The federal government is joining Enbridge Inc. in not appealing a Federal Court of Appeal ruling quashing a 2014 Conservative decision to approve the $7.9 billion Northern Gateway pipeline, Postmedia has learned.

 

John Carruthers, President of Northern Gateway said in a news release, “We believe that meaningful consultation and collaboration, and not litigation, is the best path forward for everyone involved. We look forward to working with the government and Aboriginal communities in the renewed consultation process.”

Northerngatewayroutemapdec2012w

Northern Gateway news release

VANCOUVER, Sept. 20, 2016 /CNW/ – Northern Gateway will not appeal a recent Federal Court of Appeal decision that reversed the project’s federal approval certificate. The Federal Court of Appeal found that the National Energy Board’s Joint Review Panel recommendation was acceptable and defensible on the facts and the law. The Court, however, concluded that further Crown consultation is required.

Northern Gateway supports the path outlined by the Federal Court of Appeal for the Federal Government to re-engage with directly affected First Nations and Métis communities to ensure thorough consultation on Northern Gateway is undertaken.

Statement from John Carruthers, President, Northern Gateway:

Ray Philpenko
Northern Gateway’s Ray Philpenko gives a presentation on pipeline leak detection to Kitimat Council, Feb. 17. 2014. (Robin Rowland/Northwest Coast Energy News)

“We believe that meaningful consultation and collaboration, and not litigation, is the best path forward for everyone involved. We look forward to working with the government and Aboriginal communities in the renewed consultation process. We believe the government has a responsibility to meet their Constitutional legal obligations to meaningfully consult with First Nation and Métis. It also reflects the first priority of Northern Gateway and the 31 Aboriginal Equity Partners to build meaningful relationships with First Nation and Métis communities and ensure their voice is reflected in the design of the project.

We believe that projects like ours should be built with First Nation and Métis environmental stewardship, ownership, support, and shared control. Northern Gateway, the Aboriginal Equity Partners, and our commercial project proponents remain fully committed to building this critical Canadian infrastructure project while at the same time protecting the environment and the traditional way of life of First Nation and Métis and communities along the project route.

In order to encourage investment and economic development, Canadians need certainty that the government will fully and properly consult with our nation’s Indigenous communities. We look forward to this process and assisting those communities and the Federal Government with this important undertaking in any way we can.

The economic benefits from Northern Gateway to First Nation and Métis communities are unprecedented in Canadian history. As part of the opportunity to share up to 33 percent ownership and control in a major Canadian energy infrastructure project, the project’s Aboriginal Equity Partners will also receive $2 billion in long-term economic, business, and education opportunities for their communities.

The project would add over $300 billion to Canada’s gross domestic product over the next 30 years, 4,000 construction jobs and 1,000 long-term jobs, $98 billion in tax revenue, and an estimated $100 million investment in community programs and services. Northern Gateway will provide a badly needed multibillion dollar private infrastructure investment in Canada’s future.”

Statement from the Aboriginal Equity Partner Stewards (Bruce Dumont, President, Métis Nation British Columbia; David MacPhee, President, Aseniwuche Winewak Nation; Chief Elmer Derrick, Gitxsan Nation Hereditary Chief; Elmer Ghostkeeper, Buffalo Lake Métis Settlement):

“We support Northern Gateway’s decision to not appeal the recent decision by the Federal Court of Appeal. This is a reflection of the commitment to the new partnership we are building together and their support of meeting Constitutional obligations on government to consult.

The Federal government has publically stated they are committed to reconciliation with First Nation and Métis communities. As such, we are now calling on this same government to actively and fully undertake the required consultation as directed by the Federal Court of Appeal in relation to the Northern Gateway project.

The Aboriginal Equity Partners is a unique and historic partnership that establishes a new model for conducting natural resource development on our lands and traditional territories. We are owners of Northern Gateway and are participating in the project as equals.

Environmental protection remains paramount and as stewards of the land and water, and as partners in this project, First Nation and Métis communities have a direct role in the environmental protection of the lands, waters, and food sources along the pipeline corridor and in marine operations. Our traditional knowledge, science, and values will be used to design and operate land and coastal emergency response to make the project better. We believe with this project there is an opportunity to work together with the Federal Government to improve marine safety for all who live, work, and depend on Canada’s western coastal waters.

This ownership ensures environmental stewardship, shared control, and negotiated business and employment benefits. Collectively, our communities stand to benefit from more than $2 billion directly from this Project.

Our communities need the economic and business benefits that Northern Gateway can bring. We are focused on ensuring our communities benefit from this project and are actively involved in its decision making so we can protect both the environment and our traditional way of life through direct environmental stewardship and monitoring.

Our goal is for Northern Gateway to help our young people to have a future where they can stay in their communities with training and work opportunities. We remain committed to Northern Gateway and the opportunities and responsibilities that come with our ownership. We also remain committed to working with our partners to ensure our environment is protected for future generations.”

 

National Geographic maps Haisla and other First Nations’ traditional territory, pipeline routes and BC ‘s wild salmon

The September issue of National Geographic includes a large map of British Columbia it calls “Claiming British Columbia.”

natgeohaisla3
(National Geographic)

The map has three themes: First Nations’ traditional territory, the routes of proposed pipeline projects, both LNG and diluted bitumen, and it features a sub map that looks at what the map calls the “Troubled Salmon” fishery.

The cartographers at National Geographic are being very careful, avoiding such troubling issues as competing land claims among First Nations, unresolved land claims with the federal and provincial governments and treaty status.

natgeohaisla
(National Geographic)
(National Geographic)
(National Geographic)

So by and large the map groups First Nations by language group unless there are definite treaty or reserve boundaries. Large reserves under the Indian Act are on the map, but given the post stamp size of many reserves in British Columbia, those reserves are too small to be seen on the map. Towns and cities are identified as “First Nations” communities which often overlap with settler communities. Again the map misses many smaller communities, so Kitimat is on the map, while Kitamaat Village is not.

(National Geographic)
(National Geographic)

The map identifies Haisla traditional territory as “Xenaksilakala/Xa”islakala” and also includes the Kitlope Heritage Conservancy Protected area.

The article in the September issue is called The Pacific Coast, but unfortunately there is not much of a tie-in with the map, since it concentrates on California and Alaska with only a passing mention of British Columbia.

On the obverse side of the map is the poster that is promoted on the magazine cover, a beautiful painting of “The Changing Pacific Coast” which covers kelp and every creature from phytoplankton and zooplankton all the way to humpback whales and sea gulls (but for some reason no bald eagles). It is likely that poster will be on display in classrooms up and down the coast before school opens next week.

Don’t expect a Final Investment Decision on LNG until (or if) Brexit is resolved

Analysis

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.

brexitkitimat

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.

As Don Pittis, business columnist for CBC.ca wrote in the immediate aftermath:

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. )

Rio Tinto

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.

On June 29, outgoing President Barack Obama also looked at aluminum at the recent “Three Amigos” summit in Ottawa, noting in the news conference.

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?

A We Want LNG Canada lawn sign in Kitimat. (Robin Rowland/Northwest Coast Energy News)
A We Want LNG Canada lawn sign in Kitimat. (Robin Rowland/Northwest Coast Energy News)

So the boom and bust cycle once again moves to bust.

Ellis Ross, chief councillor of the Haisla First Nation, speaking to CBC Radio said Ross said

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.

LNG Canada postpones Final Investment Decision

LNG Canada has postponed the Final Investment Decision on the Kitimat project citing the “impact of global industry challenges.”  The latest estimates said that the project would cost $40 billion.

The news release says that despite strong community support and regulatory approval,  what LNG Canada called “the context of global industry challenges, including capital constraints” led to the decision. In other words, the continued low price of oil is constraining projects across the energy industry.

LNG Canada’s Joint Venture Participants Delay Timing of Final
Investment Decision

Impact of global industry challenges, despite strong project fundamentals

Vancouver, British Columbia — Today, LNG Canada announces that its joint venture participants –  Shell, PetroChina, Mitsubishi Corporation and Kogas – have decided to delay a final investment decision on LNG Canada that was planned for end 2016.

LNG Canada remains a promising opportunity – it has strong stakeholder and First Nations’ support, has achieved critical regulatory approvals, has important commercial and engineering contracts in place to design and build the project, and through its pipeline partner Coastal Gas Link, has received necessary environmental approvals and First Nations support along the pipeline right-of-way.

“Our project has benefitted from the overwhelming support of the BC Government, First Nations – in particular the Haisla, and the Kitimat community. We could not have advanced the project thus far without it. 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,” said Andy Calitz, CEO LNG Canada.

Through their efforts to build a strong LNG sector for Canada, and a critical, cleaner energy alternative for the world, the governments of British Columbia and Canada have developed sound fiscal and regulatory frameworks for success.

LNG-Canada-Media-Release0716However, 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. At this time, we cannot confirm when this decision will be made.

In the coming weeks, LNG Canada will continue key site preparation activities and work with its joint venture participants, partners, stakeholders and First Nations to define a revised path forward to FID.

LNG Canada Joint Venture Participants are Shell (50%), PetroChina (20%), Mitsubishi Corporation (15%)
and Kogas (15%).

Haisla Nation chief councillor Ellis Ross issued a statement that said:

Haisla Nation Council very firmly believes in the future of liquefied natural gas for the Kitimat Valley and Haisla territory. It is an industry which has the capacity to grow jobs, provide new training opportunities and provide a sustained quality of life for Haisla members. It’s worth remembering that LNG Canada is a relatively new project to the area, and decisions on major projects such as these can take a long time to reach.

Today’s decision was the second time the FID was postponed. Andy Caloz LNG Canada’s CEO was quoted by Bloomberg News as saying that the project hasn’t been canceled. It has all the necessary approvals from regulators in Canada and doesn’t require any more work in the country.

“The whole global LNG industry is in turmoil,” Calitz told a conference call, Bloomberg reported, adding that Western Canada still has advantages including its proximity to customers in Asia. “I’m confident that the Japanese market remains available to LNG Canada.”

LNG Canada Kitimat project receives BC facility permit

LNG Canada logoThe 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.

 

Unifor 2301 protest says Rio Tinto is cutting back on smelter health and safety

UNIFOR-theunion-Canada-wMembers of Unifor 2301 rallied in front of the Rio Tinto offices at City Centre Mall in Kitimat, Wednesday, October 7, to protest against what they called “precarious work” and health and safety issues at the Rio Tinto BC Operations aluminum smelter.

The rally was part what the union calls a “Rio Tinto Global Day of Action” aimed at Rio Tinto operations in North America, Europe, Africa and Australia. Unifor 2301 is part of the “Rio Tinto Global Union Network,”

Sean O’Driscoll, president of the local, concentrated on what he said was an increasingly tense relationship with Rio Tinto over health and safety issues. O’Driscoll told a group of supporters that relations with the company over health and safety have gone down hill since Rio Tinto took over Alcan.  He said the CAW,  predecessor to Unifor, had negotiated a strong health and safety agreement with Alcan that Rio Tinto is now trying to weaken down to minimum government imposed standards.

Unifor 2301 president Sean O'Driscoll addreses the Global Day of Action At Rio Tinto Rally at City Centre, Oct. 7, 2015. (Robin Rowland/Northwest Coast Energy News)
Unifor 2301 president Sean O’Driscoll addreses the Global Day of Action At Rio Tinto Rally at City Centre, Oct. 7, 2015. (Robin Rowland/Northwest Coast Energy News)

 

O’Driscoll said that the list of grievances between the union and management are growing and that instead of trying to solve the grievances, RIo Tinto has filed a grievance of its own claiming the union has filed too many grievances.

Participants in the Unifor 2301 rally. (Robin Rowland/Northwest Coast Energy News)
Participants in the Unifor 2301 rally. (Robin Rowland/Northwest Coast Energy News)

 

The main reason for the rally was a worldwide protest over what the union calls “precarious work,” the use of short term, usually poorly trained workers,  what most industries call call “casuals” to save money.  The other issue at the protest was increasing contracting out.

 A participant in the rally listens to speeches. (Robin Rowland/Northwest Coast Energy News)
A participant in the rally listens to speeches. (Robin Rowland/Northwest Coast Energy News)

O’Driscoll also pointed to the controversial issue of increased sulphur dioxide emissions from the upgraded smelter. Unifor has joined environmental groups in a successful court challenge to  the BC  Environmental Assessment Agency’s approval of the emission plan.

Sean O'Driscoll and other union leaders at the rally. (Robin Rowland/Northwest Coast Energy News)
Sean O’Driscoll and other union leaders at the rally. (Robin Rowland/Northwest Coast Energy News)
A Plant Protection security guard recorded and photographed the rally in front of the Rio Tinto City Centre office. (Robin Rowland/Northwest Coast Energy News)
A Plant Protection security guard recorded and photographed the rally in front of the Rio Tinto City Centre office. (Robin Rowland/Northwest Coast Energy News)
A spectator watches the rally. (Robin Rowland/Northwest Coast Energy News)
A spectator watches the rally. (Robin Rowland/Northwest Coast Energy News)
Participants applaud at the conclusion of the rally. (Robin Rowland/Northwest Coast Energy News)
Participants applaud at the conclusion of the rally. (Robin Rowland/Northwest Coast Energy News)

Another LNG shake up: Shell reported to be in talks to acquire BG Group

Shell logoNumerous media sources are saying that Royal Dutch Shell is in talks to acquire the BG Group.

Shell is developing the LNG Canada project in Kitimat,  while BG had been developing an LNG proposal for Prince Rupert.  BG announced last fall it was delaying further development of the Prince Rupert project due to uncertainty in the liquified natural gas market.

An initial report came from Bloomberg, which said:

Buying BG would be Shell’s largest acquisition since the $60.3-billion (U.S.) merger of its Dutch and U.K. parent companies in 2005, according to data compiled by Bloomberg. It would unite the U.K.’s first- and third-largest natural gas producers….BG posted a record $5-billion loss in the fourth quarter, mainly due to writing down the value of its Australian assets as commodity prices fell.

BBC News quotes the Wall Street Journal as matching the report.

A Shell spokesman told the BBC: “We’re not making any comment.”
No-one from BG Group was immediately available to confirm or deny the WSJ’s report.

Last fall, when BG put the Prince Rupert project on hold, with a financial investment decision postponed until 2019, the Financial Post, quoted BG executive chairman Andrew Gould as saying, “We’re not abandoning Prince Rupert, we’re pausing on Prince Rupert to see how the market evolves particularly in function of total supply that will come out of the U.S.”

At the time, analysts noted that unlike Shell, Chevron and Petronas, BG had no gas extraction assets in Canada. BG is a privatized spinoff of the once nationalized British Gas company in the UK.

 

 

 

 

 

 

Woodside, new Kitimat LNG partner, borrows $1 billion in new bonds

Woodside PetroleumWoodside Petroleum, the new partner with Chevron in the Kitimat LNG project is raising US$1 billion through the issue of corporate bonds into the U.S. market “to fund its capital and exploration expenditure program.”

A news release from Woodside says “the bonds will be issued by Woodside Finance Ltd, a wholly owned subsidiary of Woodside Petroleum Ltd, and will consist of US$1 billion of 10 year bonds with a coupon of 3.65 per cent. The bonds will be guaranteed by Woodside Petroleum Ltd and its wholly owned subsidiary, Woodside Energy Ltd.”

Bloomberg notes that Woodside paid $2.75 billion to Apache for its stakes in the Kitimat LNG and the Australian Wheatstone LNG project.

Woodside agreed in December to pay $2.75 billion to Apache Corp. for stakes in two natural gas projects, and it expects to spend about $6.2 billion in 2015.

Even after its agreement with Apache, Woodside has a strong balance sheet that may allow the company to make another acquisition and take advantage of low crude oil prices, according to a Feb. 18 report from Goldman Sachs Group Inc. Woodside has $6.8 billion in cash and available debt facilities, the energy producer said in a presentation that same day.

Woodside said last week that full-year net income rose 38 percent to $2.41 billion, helped by its Pluto project. Brent crude oil prices have tumbled 44 percent over the past 12 months.

In January, Australian Mining reported that Woodside had reached an “non-binding contract…  as an agreement between Woodside Petroleum and Adani Enterprises to cooperate in developing commercial initiatives for long-term supply of gas to the Indian market.”

Mongolia to hold text message referendum on future of Rio Tinto copper mine

Rio TintoMongolia will hold a reality television style text message referendum on the future of Rio Tinto’s troubled Oyu Tolgoi copper mine project, the Financial Times reports.

The FT says Mongolian prime minister Saikhanbileg Chimed will ask voters whether their country should develop more of its mineral resources or resort to austerity to support the faltering economy.

Mongolian voters will have four days, beginning Saturday, to text their vote on the future of Rio Tinto’s plans for the  $6 billion project.

Oyu Tolgoi
Shaft at the Rio Tinto Oyu Tolgoi copper and gold mine in the southern Gobi, Mongolia (Brücke-Osteuropa via Wikipedia)

Economists say the copper mine project, which is stalled because Rio Tinto has been unable to reach an agreement with Mongolia over project financing and revenue sharing could generate about a third of the country’s gross domestic product. The lack of an agreement, in concert with current instabilty on financial markets has sent Mongolia’s currency plunging.

Like Kitimat’s plebiscite on the Northern Gateway, the vote will be non-binding. The FT says the vote “could help Mr Saikhanbileg broker a consensus in favour of allowing OT to proceed, cutting through the arguments of critics who say Mongolia is not getting its fair share of the mine’s earnings.”

The FT reports: “The prime minister, who explained the referendum this week on television, was trying to appeal to the general public ‘over the heads of squabbling factions in parliament and break the logjam.'”

Full story at Mongolia holds text message vote on mining v austerity
(registration required)

Moricetown band joins Pacific Trail Partnership, Kitimat LNG now has all First Nation councils on board

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.

First Nations Limited PartnershipVancouver, 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 Logo“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.