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Possibility opens for LNG exports from Canada

A federal regulator has signed off on a TransCanada project that was put on hold last year amid concerns about a weak market.

By Daniel J. Graeber
Possibility opens for LNG exports from Canada
A Canadian energy regulator clears a path for construction of a pipeline that could feed an LNG export terminal in British Columbia. Photo courtesy of TransCanada

May 24 (UPI) -- While formerly on the shelf, a pipeline that could feed a liquefied natural gas terminal in British Columbia can proceed, federal regulators said.

The National Energy Board gave Nova Gas Transmission Ltd., a subsidiary of TransCanada, approval to build a natural gas pipeline that could supply an LNG export terminal in British Columbia. The NEB's move removed a requirement that construction would have to come after investment decisions on LNG.

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"In its application, NGTL requested changes to the North Montney Mainline certificate to allow the gas to flow east, and to proceed with certain components of the project independently of any final investment decision related to liquefied natural gas exports from the west coast of British Columbia," the NEB's statement read.

In July, the project was put on hold after Malaysian energy company Petronas said that, as the head of a partnership, it would no longer pursue the project because of an "extremely challenging environment" brought on by a weak market.

RELATED More heat on British Columbia over Trans Mountain pipeline

Pipeline and energy company TransCanada, which was involved with a Petronas affiliate on the project, said it was disappointed with the decision, but would be reimbursed for costs associated with the development.

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The project carries an estimated cost about $28 billion and includes hundreds of miles of pipeline from TransCanada, which said there are other potential LNG projects that it would continue to explore for British Columbia.

"These facilities are critical to the timely and economic development of the tremendous natural gas resource in the North Montney play," Russ Girling, TransCanada's president and chief executive officer, said in a statement.

RELATED Saskatchewan joins Alberta in Trans Mountain fight

Federal data point to as much as 449 trillion cubic feet of marketable natural gas and 1.1 billion barrels of marketable oil in the Montney formation.

John Horgan, the premier for British Columbia, in an inaugural mandate to his ministers last year called for stronger coordination with Green Party advocates. In a letter to the provincial energy minister, Horgan said residents should benefit from LNG so long as the programs include climate safeguards and provide a fair return on investment.

Horgan is at the center of the energy debate in Canada. One of the top energy exporters to the United States, the federal government has courted Asian economies as part of a diversification effort.

RELATED Kinder Morgan backs away from Trans Mountain expansion

Horgan's administration has taken legal action that could thwart Kinder Morgan's plans to expand the capacity of the Trans Mountain oil pipeline to the western Canadian coast. Citing provincial disputes, the pipeline company said it would wait until the end of the month before making final decisions on the fate of the project.

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