Canada's LNG ambitions get support

CALGARY, Alberta, June 12 (UPI) -- Energy company TransCanada said Friday it had the investment decisions necessary to plan to start pipeline construction for an LNG plant in British Columbia.

Pacific NorthWest LNG, a joint venture led by Malaysia's state-owned Petronas, said this week it was resolved to move forward with a final investment decision for the $9.3 billion liquefied natural gas terminal slated for ports near Prince Rupert, British Columbia.

Project partner TransCanada said the decision marked a significant step forward for the project. The company said the decision paves the way to the construction of a 559-mile North Montney natural gas pipeline that would connect to existing infrastructure and the proposed Petronas project.

"The Pacific NorthWest LNG decision and the government of Canada's approval of the North Montney Project are significant advancements to new market access for Canada's abundant natural gas resources," TransCanada President and Chief Executive Officer Russ Girling said in a statement.

Petronas said the west coast project hinges on a string of regulatory and environmental hurdles. TransCanada nevertheless said it plans to start construction this year with the aim of bringing the gas pipeline into service by the end of the decade.

Provincial Minister of Natural Gas Development Rich Coleman said the government has created the necessary environment to put the LNG export industry in a position of strength to become the largest source of private-sector investments.

"We recognize there is work to do, including an environmental assessment by the Government of Canada, as well as engagement with First Nations," he said. "The province of British Columbia will continue to work with all partners to ensure the project is developed with the highest standards of environmental protection and enhancement."

A report from Canada's National Energy Board said conventional natural gas exports have declined in part in response to the growing production of gas from shale deposits in the United States. NEB said it's received more than 20 LNG export licenses since 2014, though export terminals have yet to break ground.

Petronas in December said it was delaying its project on the western Canadian coast because of cost concerns. The NEB said that, because of costs and demand dynamics, only the most competitive LNG projects will succeed.

Canadian Prime Minister Stephen Harper announced tax breaks to support the LNG business during a February tour of Asia.

Harper has tried to diversify an export economy that relies almost exclusively on the United States as its destination for oil and natural gas. His government last year signed free-trade deal with South Korea, which included LNG arrangements, Canada's first with an Asian power.