The September issue of National Geographic includes a large map of British Columbia it calls “Claiming British Columbia.”
(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.
(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)
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.
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. )
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)
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.
Haisla Nation Chief Counsellor spoke at Mt. Elizabeth Theatre on June 9, 2015, introducing David Suzuki who was on a speaking tour. This is a lightly edited report on his remarks that outline some of the dilemmas facing the Haisla and the Kitimat valley in an age that needs development but faces climate change.
Good evening.
Among chiefs, I am elected, not hereditary, you are born into that position, I wasn’t born into it.
I am basically a regular commoner just like you guys with a high school education and one year of college and a lot of experience outside my community that I bring back.
These topics about climate change locally, provincially, nationally and worldwide, they’re complicated topics.
Haisla Chief Counsellor Ellis Ross speaks at Mt. Elizabeth Theatre, June 9, 2015 (Robin Rowland/Northwest Coast Energy News)
There’s no one true fix for all of it. The problem is that the Haisla have been thrust into the middle of it and we have to answer it, which is very unfair.
So when we’re talking about what really is a Haisla value, a west coast, a British Columbia value. I must tell you I value the Haisla people, my people, that land, the territory, I think about the Haisla people because I don’t think anyone has given the Haisla people a priority in the last 40 to 50 years.
All the decisions that were made about Haisla territory, that affected out people, were made without us.
The result was that we ended up with 80 per cent unemployment, historically over the last 40 years we have ended up with cancer and we can’t get rid of it.
Poverty, people couldn’t get enough money to fix their bathrooms when the floor was rotting out.
The saying is that you can always tell when the reserve starts is when the pavement ends is true. Unless there’s a political agenda to actually pave the road to the village. The environmental questions that have been raised over the past ten years are not new to the Haisla.
In the 70s it was the Haisla alone who tried to battle emissions when nobody even knew what emissions meant. They tried to stop the effluent dumping into the river that killed off the river they tried to stop the diking of the river so parts of the land could be protected, parks.
When the Haisla knew that the oolichan that was estimated to be hundreds of thousands of tons, were dying off quickly in the span of five years. Nobody listened.
Now the DFO and Canada is realizing that the demise of the oolichan is a signal that something is wrong with the ecosystem.
I would love that someone would come around to the idea of thanking the Haisla people for all the work that they did and went and unheard even in meetings like this today.
And we’re not even talking about salmon.
In all this time, I’ve read all the documents, all the speeches and listened to all the promises of a better tomorrow for all the people but nobody delivered it.
Countless academic papers have been written about Indian poverty.
Nothing was done.
Non-profit organizations used the Haisla to further their cause and left town when they had achieved what they had achieved.
At the same time all the decisions continued to be made without us. And everybody benefited except us.
What happened in the end and the corporations made their billions and made enough money to pay off the mortgage and move down south, the Haisla were left with the mess to clean up. Today we’re still battling to get some of these sites cleaned up and we’re still not getting help.
I don’t blame anyone for this. Whether you’re am environmental organization, a government or a corporation or a non-profit organization, I don’t blame you for this because you have a mandate, you have a special interest. That’s what you’re trying to achieve.
I have a mandate. I do have an organization now that is fully equipped to look at every single permit that comes from the provincial government and the federal government and try to mitigate it given our capacity and our lack of funding.
But some of that benefit has to flow to the Haisla people. It’s our territory.
When you think about what has happened to us, the Haisla, we think about residential schools and I’ve been reading the debate on whether or not it’s genocide or not and I think people are missing the point.
Residential schools were only 10 per cent of a larger program to get rid of the Indian.
The ninety per cent was what was stolen from us as well. The land was taken away and we were put on a chunk of land across the Channel, that was described by the Indian Agent as worthless, it’s not even good for agriculture so give it to the Indians. We had to get permission from the federal government to leave that reserve. We had to get a piece of paper that said he’s allowed to leave the reserve and go pick berries.
We also have had no help other than some academic programs and some sort of study to deal with our suicides. I’m not just talking Haisla here. I really thought that one suicide every five years was really a bad thing. But finding out that my neighbors down the road from here to Prince George are dealing with ten suicides in the first quarter of this year.
It breaks my heart.
Who is responsible for that? If it’s not the government, if it’s not the non-profits, if it’s not corporations, who is it?
I stepped up and said I’ll take full responsibility for this but that means I have a hard message to deliver and I will deliver it on behalf of the Haisla people.
When it comes to climate change, we are living at a very unfortunate time, because finally we’re accepted at the provincial table, at the federal table, the corporate table.
We’re being included but unfortunately, we have to look at climate change as well. It’s a very tough position to be in when you’ve got a Grade 12 education from 1984 and one year of college education in 1985.
It’s a very tough topic, I can tell you. I’ve been to China, I’ve been to Korea and no matter what you say about the emissions there, Canada and BC have no problems with emissions here until you visit China.
They’re not going to get off crude oil, they’re not going to get off diesel fuel, they’re not going to give up coal because a billion people there want the same standard of living that you have in Canada. And I’m talking about India as well. They want the same standard. They want good houses; they want to own a car. They are not going to stop their thirst for energy.
I don’t have the answers.
I still believe that natural gas is a lot cleaner than coal and even if you put a small dent in it, it’s not enough to get these guys off nuclear power.
And the solar power you’re talking about, they do it for show but that’s not going to meet the energy needs of China. We’re not even talking about India; we’re not even talking about Korea.
You say can you help get China off dirty fuel, but all their pollution keeps getting dumped on South Korea.
I represent 1700 people, how am I going to do that?
We’re being asked to do a near impossible task while I’m trying to dig my people out of poverty. At the same time, when we get this opportunity we’re giving our members very mixed messages, including our young people which is heart breaking for me.
Because we’re telling them get an education, don’t be a burden on society, get a job, but by the way there are no jobs here, there’s no way to get into existing industries so you better go to the oil fields of Alberta to get a job. A lot of our people head over there or to Vancouver.
I’ve been following this debate on climate change for quite a while now, for over six years. I’ve been listening to everybody, I’ve been listening to corporations, being listening to governments, been listening to non-profits, but on behalf of the Haisla Nation Council, I’m here to tell you, that when it comes to the future of the Haisla I have very little patience with this. I don’t want to see another essay about what to do about Indian suicides.
I believe that our people are being sick and tired of being left out and left behind, while everyone else is moving on with their lives. I do want to what’s best for the region I do want to do what’s best for the province and Canada and the world. But I will not do it at the expense of the Haisla people. We’ve been at the dirty end of the tick for the last 40 years. It’s going to stop. Thank you very much and enjoy your evening.
The United States Coast Guard says it is monitoring repairs aboard the liquid natural gas carrier Excel in Homer, Alaska, Friday, May 1.
According to a news release from Coast Guard Sector Anchorage, USCG issued an order for the vessel to remain anchored in Kachemak Bay near Homer after the 908-foot, Belgium-flagged vessel experienced a loss of propulsion due to a failed engineering gasket while inbound to Cook Inlet Monday.
The Excel was bound for the existing LNG facility, the Kenai LNG Plant, located in Nikiski on the Kenai Peninsula, in Alaska. The state of Alaska is planning to expand the LNG facilities there, and that site is a potential rival for British Columbia’s LNG export plans.
The Coast Guard release says:
The Excel was examined by Coast Guard inspectors from Marine Safety Detachment Homer, Tuesday, who conducted a Port State Control annual exam and verified the engineering gasket was replaced.
While preparing to get underway Wednesday, the vessel experienced an automated engineering casualty and canceled its voyage until a Bureau Veritas (BV) classification surveyor could arrive and verify the engineering casualty was fully resolved. After arriving aboard the vessel, the class surveyor directed the vessel’s crew to test the automated engineering system and deduced that the casualty was a product of a faulty engine order telegraph; a device used on ships for the pilot on the bridge to order engineers in the engine room to power the vessel at a certain desired speed. Coast Guard Sector Anchorage issued another order for the vessel to remain in Kachemak Bay.
Friday, the vessel was allowed to continue sailing to her destination at the ConocoPhilips LNG plant in Nikiski after additional safety measures were implemented. As part of the safety measures, the tug Stellar Wind escorted the vessel from Kachemack Bay to Nikiski and a second tug, the Glacier Wind, stood by in Nikiski to assist with docking operations.
The Excel completed her voyage and safely moored at the ConocoPhilips pier in Nikiski at approximately noon Friday where it remains until permanent repairs are verified by the class surveyor and Coast Guard inspectors.
“Ensuring safe navigation in Western Alaska, particularly in Cook Inlet, is one of my highest priorities,” said Capt. Paul Mehler III. “Our crews worked closely with the Southwest Alaska Pilots Association, the class surveyor and towing vessel industry to coordinate a safe and secure transit of the Excel from Kachemak Bay to Nikiski. The weather was also in our favor with clear skies, light winds, and steady ebb tide during the transit in Cook Inlet.”
The Kenai Alaska LNG plant (ConocoPhillips)
The LNG export plant at Nikiski was built in 1969 by Phillips Petroleum and Marathon Oil. Phillips later merged with Conoco and subsequently purchased Marathon’s 30 per cent share. The Nikiski plant sent LNG shipments to Japan from 1969 to 2010 under long-term contracts with Tokyo Gas and Tokyo Electric, when the contracts expired.
In 2011 ConocoPhillips announced that it would be ceasing LNG exports from Kenai and preserving the plant for potential future use.
With the LNG rush, market conditions changed and the the plant resumed making LNG in early 2012 and exported four cargoes to Asian customers over the course of that year.
In March 2013, the export licence expired and the LNG plant was put on standby. As interest in LNG grew, and at the urging of the state of Alaska, in December 2013 ConocoPhillips Alaska applied to resume LNG exports and the U.S. Department of Energy approved the resumption in April, 2014. ConocoPhillips says it received authorization to export a total of 40 BCF of liquefied natural gas over a two-year period from 2014 through 2016.
The Alaska LNG project is “a proposed $45 to $65 billion liquefied natural gas export project – it would be the largest single investment in Alaska history. The project has the potential to create between 9,000 and 15,000 jobs during the design and construction phases; plus approximately 1,000 jobs for continued operations. In addition to generating billions of dollars in revenue for Alaska, the project will provide access to natural gas for Alaskans.” The project’s participants are the Alaska Gasline Development Corporation (AGDC) and affiliates of TransCanada, BP, ConocoPhillips, and ExxonMobil.
Chevron will not be making a final investment decision on the Kitimat LNG project in 2015, Pat Yarrington, the company’s vice president and chief financial officer told the first quarter earnings conference call Friday, May 1.
All FIDs for Chevron projects around the world, with one exception, are on hold for this year Yarrington said.
“In terms of other FID projects, part of the reduction that we took in our capital spending from 2014 to 2015 really did relate to the pacing of other major capital projects,” Yarrington said. “Kitimat is a primary one there, we moved spending on that out considerably. We are only limiting ourself to appraisal work and continuing to look at the design and the cost structure. “
Overall, in all aspects of the company’s operations, Yarrington said Chevron is “aggressively pursuing cost reductions” by reopening contracts with suppliers, resulting in $900 million in agreed reductions around the world.
Chevron says Gorgon Project in Western Australia is now 90 per cent complete. All Train 1 modules and 13 of 17 Train 2 modules are on their foundations. (Chevron)
Meanwhile, two of Chevron’s LNG projects in Australia have reached “key milestones,” she said. As for the Gorgon project in Western Australia, she said. “We’re on schedule for Gorgon startup in the third quarter of this year and first commercial cargo before the end of the year.”
The Gorgon Project is a joint venture between the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent) supplied by the Greater Gorgon Area gas fields. It includes the construction of a 15.6 million tonne per annum (MTPA) liquefied natural gas (LNG) plant on Barrow Island and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to Western Australia.
“We’re on schedule for Wheatstone,” Yarrington said. “We’ve had seven of 24 major process modules delivered on site, the trunk line is installed and hydro tested, the dredging is complete, the piling has been completed, the roofs are on both of the LNG tanks. We continue to make good processs both on shore and off shore.”
The Wheatstone Project is an LNG and domestic gas operation near Onslow, in the West Pilbara region of Western Australia. The project’s initial capacity is expected to be 8.9 million metric tons per year of LNG.
Chevron promotional video showing Gorgon is one of the world’s largest natural gas projects and the largest single resource development in Australia’s history. (Kitimat residents note the cruise ship docked at the project)
As well, Chevron in Australia has announced new gas discoveries as a result of further drilling success in the Greater Gorgon Area located in the Carnarvon Basin, a premier hydrocarbon basin offshore northwest Australia.
The Isosceles-1 exploration discovery well encountered approximately 134 metres (440 feet) of net gas pay in the Triassic Mungaroo Sands in 968 metres of water (3,175 feet). The well fulfilled the second year work commitment in the exploration program. It is located in the WA-392-P permit area approximately 95 kilometres (60 miles) northwest of Barrow Island, off the coast of Western Australia.
“This discovery is a continuation of our exploration success and further positions our company as a key supplier for future liquefied natural gas (LNG) demand in the Asia-Pacific region,” said Melody Meyer, president, Chevron Asia Pacific Exploration and Production Company
Overall Chevron (NYSE: CVX) reported earnings of $2.6 billion ($1.37 per share – diluted) for first quarter 2015, compared with $4.5 billion ($2.36 per share – diluted) in the 2014 first quarter. Foreign currency effects increased earnings in the 2015 quarter by $580 million, compared with a decrease of $79 million a year earlier.
Sales and other operating revenues in first quarter 2015 were $32 billion, compared to $51 billion in the year-ago period.
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.”
The Bish Forest Service Road will reopen to the public on March 1, 2015. With the upgrades created by the Chevron-led Kitimat LNG project, the single lane logging rough logging is now a high quality gravel “resource road.”
The first 12 kilometres of the road will be open “to provide public access to connecting roads, recreational areas and natural hiking trails,” Chevron says.
“In terms of Kitimat specifically we’ve completed a number of key projects,” said David Molinski, Chevron’s lead for Regulatory and External Affairs. “We’ve made the upgrades to the Forest Service Road, and the Early Works we’ve been doing on site at the Bish Cove site.
A construction check point on the Bish Forest Service Road during a media tour, October, 2014. (Robin Rowland/Northwest Coast Energy News)
“So we’ve been for the past couple of years putting a lot of effort on advancing that part of the project. We’ve completed the key elements of the Forest Service Road upgrades over the past four years,” Molinksi said, “When we got there it was essentially a single track logging road and it was very difficult to access the Bish Cove site. So we wanted to make sure we had a road that would help support the project. That means having an all weather access all year round. That’s a very substantial development.
“It’s a public road, it’s always has been a public road, in fact it’s owned by the Crown.
“It’s time now for us to reopen that road. We had it closed for safety reasons. We wanted to make sure we completed the work on the road. There was blasting, moving rock, breaking down rock, stabilizing slopes.
“We had to make sure we could that work done in a safe way. Now that’s done, we’ve completed the road upgrades and we’re very happy to reopen it to the public. We look at it as being a long term legacy for the community.
Safety rules for travelling on the Bish Forest Service Road. (Chevron poster)
“The road is available for people in the community to use. There’s a number of recreation sites people in the community have used for many generations. So we’re pleased we can turn that road back into being publicly available and they can use it safely so they can get access to the areas they love around this community.”
In 2015, Chevron says, some work may continue on the road and “may include power line installation, paving and other construction activities.” There is also a need for the road to “stabilize” Molinksi said. “We’ll come back down the road and make a decision about what the right timing is to cap that road. Right now we don’t have a specific schedule It’s good for the road to stabilize and settle over the next couple of seasonal cycles.”
The decision about the future of the road will depend on the uncertain investment climate, due to the downturn in the energy industry.
In a panel at the open house on Feb. 24, Chevron said that projects like Kitimat LNG “are significant, very large and extremely complex with multiple moving parts that must all come together through hard work and perseverance in order to be successful.”
The Kitimat LNG open house at Riverlodge, Feb. 25, 2015. (Robin Rowland/Northwest Coast Energy News)
Chevron will continue to make a capital investment on the Kitimat side of the project but “the pace of field work in Kitimat at the LNG Plant will be decreasing as we focus capital spending on other aspects of the project.
For 2015, Chevron will concentrate on exploration in northeast British Columbia, Molinksi said, “That’s where the Liard Basin and the Horn River Basin are located and that’s where we’re developing the natural gas, substantial natural gas resources to support this project… This year we’re going to focus on getting additional data on the natural gas that we have a number of rigs that are running right now. We’re going to be drilling wells over 2015 and make sure we have a good understanding of those wells that are going to be supplying gas to this project. We have to know as much about that resource as this site here.”
“As a result there will be a decrease in site preparation work associated with the Kitimat LNG project and the Pacific Trails Pipeline during 2015,” the Chevron panel said.
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.
Apache Corporation today announced it has agreed to sell its interest in two LNG projects, Wheatstone LNG and Kitimat LNG, along with accompanying upstream oil and gas reserves, to Australila’s Woodside Petroleum Limited for a purchase price of $2.75 billion.
The news release says:
Apache will also be reimbursed for its net expenditure in the Wheatstone and Kitimat LNG projects between June 30, 2014, and closing which is estimated to be approximately $1 billion.
Under the terms of the agreement, Apache will sell its equity ownership in its Australian subsidiary, Apache Julimar Pty Ltd, which owns a 13-percent interest in the Wheatstone LNG project and a 65-percent interest in the WA-49-L block which includes the Julimar/Brunello offshore gas fields and the Balnaves oil development. The transaction, which has an effective date of June 30, 2014, will also include Apache’s 50-percent interest in the Kitimat LNG project and related upstream acreage in the Horn River and Liard natural gas basins in British Columbia, Canada.
Based on current estimates, Apache’s net proceeds upon closing are expected to be approximately $3.7 billion. Receipt of proceeds from this transaction will trigger an estimated $650 million cash tax liability, approximately $600 million of which is associated with the income tax due on Apache’s Overall Foreign Loss account balance. Upon incurring this income tax liability, Apache estimates that it will have the flexibility to repatriate cash generated from foreign operations and/or future international strategic transactions with minimal U.S. cash tax impact.
“Today’s announcement marks the successful completion of one of our primary strategic goals of exiting the Wheatstone and Kitimat LNG projects. Apache recognizes the contribution of our employees who have worked so diligently on these projects since their inception, and we sincerely thank them for their tremendous effort. I would also like to thank Woodside’s CEO and Managing Director, Peter Coleman, and his entire staff for their hard work and professionalism in bringing this transaction to a successful conclusion. I am proud of Apache’s legacy in advancing the Wheatstone and Kitimat LNG projects, and I am confident that Woodside’s participation will have a positive impact in seeing these world-class LNG facilities through to first production. We look forward to the redeployment of the proceeds from this sale, which may be used to reduce debt, repurchase shares and to pursue other opportunities that enhance our asset base and drive profitable production growth,” said G. Steven Farris, chairman, chief executive officer and president.
Upon completion of the transaction, Apache will continue to hold upstream acreage offshore Western Australia in the Carnarvon, Exmouth, and Canning basins along with related hydrocarbon reserves and production. Apache will also retain its 49-percent ownership interest in Yara Holdings Nitrates Pty Ltd and 10-percent interest in the related ammonium nitrate plant.
The transaction is expected to close in the first quarter of 2015 and is subject to necessary government and regulatory approvals and customary post-closing adjustments. The sale of the Kitimat LNG project is subject to certain operator consents.
