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Environmental concerns in Canada prompt First Nations to turn down $1 billion offer

A First Nations group in British Columbia has unanimously voted against allowing a liquefied natural gas ship terminal near the community. The terminal would be part of a larger overall pipeline and gas project led by Pacific NorthWest LNG that the group values at $36 billion.

Pacific NorthWest offered the Lax Kw’alaams Band $1 billion, but the Lax Kw’alaams turned down the offer saying they were concerned over the environmental impacts of the project.

The LNG export facility would be situated at Lelu Island, just south of Prince Rupert. The First Nation group said that the potential disruption of water grasses, which are used as shelter from predators by juvenile salmon, was too great a risk to take. Environmental studies commissioned by Pacific NorthWest and the band reached opposite conclusions about the terminal’s impact on aquatic life, reports The New York Times. The results of a review by the Canadian Environmental Assessment Agency are expected this fall.

“Hopefully, the public will recognize that unanimous consensus in communities against a project where those communities are offered in excess of a billion dollars sends an unequivocal message this is not a money issue: this is environmental and cultural,” Garry Reece, mayor of the band, said in a statement Wednesday.

Source: NorthWest LNG Lelu Island Bridge

Source: Pacific NorthWest LNG Lelu Island Bridge

Pacific NorthWest responded to concerns about damaging the ecosystem earlier by proposing to build a 1.7-kilometer suspension bridge that would bypass the sensitive underwater ecosystem. BNN estimated that the price tag for the proposed bridge was about on par with the cash offer.

The company recently submitted additional documents requested by the Department of Fisheries and Oceans related to the updated infrastructure proposal, reports CBC.

Moving B.C. project forward is still possible

Observer and energy lawyer David Austin, who is with the firm Clark Wilson, said Tuesday before the vote that the band’s rejection wouldn’t necessarily put an end to the project.

Lelu Island is owned by the Crown and is managed by the Prince Rupert Port Authority, which means the province technically has the authority to push ahead without support from the Lax Kw’alaams.

“From a legal perspective it would be very complicated to proceed with the LNG terminal without [First Nation] support,” said Austin. “But if the circumstances were right, [it’s] not impossible.” The time needed to sort out legal concerns could push investors elsewhere, he added.

US LNG Export: Cheniere receives approval to export LNG

The Energy Department announced earlier this week that it issued a final authorization for Cheniere Energy’s (ticker: LNG) Corpus Christi Liquefaction Project to export domestically produced LNG to countries that do not have a Free Trade Agreement (FTA) with the United States. The Energy Department authorized the Corpus Christiproject to export up to 2.1 Bcfe/d of natural gas for a period of 20 years.

Source: Cheniere Energy Corpus Christi LNG Rendering

Source: Cheniere Energy Corpus Christi LNG Rendering

After the Energy Department announcement was made, Cheniere announced that its Board of Directors made a positive Final Investment Decision to construct the first two natural gas liquefaction trains at Corpus Christi. The project is designed for up to three trains with expected aggregate nominal production capacity of approximately 13.5 million tons per annum, three LNG storage tanks with capacity of approximately 10.1 Bcfe, two LNG carrier docks and a 22-mile and a 48” natural gas supply pipeline.

The first train is expected to start operations as early as 2018, with the second train expected to commence operations approximately six to nine months thereafter.

“For these major projects, getting to the point of commencing construction represents the culmination of years of dedicated hard work … we look forward to successful project execution in Corpus Christi,” said Cheniere Chairman and CEO Charif Souki.

For more insight to Cheniere and global LNG markets, click here to listen to OAG360®’s exclusive interview with Cheniere Senior Vice President of Strategy & Corporate Development Anatol Feygin.

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