Natural Gas Development Minister Rich Coleman sees a potential start of construction on B.C.'s first big LNG plant by the end of this year.

Petronas tentatively commits to Pacific Northwest LNG plant

$11-billion project still seeks environmental, provincial approvals, aboriginal consent

The Pacific Northwest LNG plant proposed near Prince Rupert now has preliminary investment approval from its proponents, prompting confidence from Natural Gas Development Minister Rich Coleman that the massive project could be under construction by the end of this year.

The consortium led by Malaysian firm Petronas confirmed it’s ready to proceed and the only conditions for a final investment decision are federal environmental review approval and B.C. government approval of the project development agreement.

The Legislature is expected to be recalled this summer to pass the deal providing tax and royalty certainty clearing the way for an expected $11-billion investment.

“It would only be derailed, I suppose, if there was something in the environmental  assessment that makes the project impossible,” Coleman told reporters Friday.

He said a construction start is possible late this year that would see the first LNG shipments moving by the end of 2019.

The outlook for LNG prices has darkened recently but Coleman said Petronas and its Asian partners have long-term contracts to sell the first 12 million tonnes of LNG.

“This product is basically sold. They have the commercial viability on this one.”

Another problem for the project is aboriginal acceptance.

The Lax Kw’alaams First Nation recently voted down a $1-billion cash offer from Petronas.

More project design work and research is underway to address aboriginal concerns about the potential impact on salmon habitat at Flora Bank near the project site, Coleman said.

“I think I see a sight line where we can satisfy the community,” he said. “I think as we come through that you’ll see that the Lax Kw’alaams will come together with every other first nation that’s already endorsed the project in the area.”

He described the opportunity as one of “generational change” for small first nations.

The federal environmental review has been paused while more information on potential habitat risks was sought.  A final decision is considered possible by fall.

LNG tankers like this one could be loading near Prince Rupert by the end of 2019 if Pacific Northwest LNG begins construction by the end of this year.  File photo.

 

 

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