Ottawa grants approval for Pacific NorthWest LNG terminal near Prince Rupert

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      Premier Christy Clark might soon have an LNG plant under construction in B.C.

      At a news conference in Richmond this evening (September 27), Ottawa announced it has approved the Pacific NorthWest LNG project.

      The $19-billion liquefied-natural gas plant and export terminal are proposed for a site near Prince Rupert, from where the product will be transported to markets in Asia. It’s backed by the Malaysian-state-owned energy corporation Petronas.

      In Richmond, Clark joined federal environment minister Catherine McKenna, Natural Resources Minister Jim Carr, and Fisheries Minister Dominic LeBlanc.

      "Today the federal government approved the Pacific NorthWest LNG project," McKenna said. "This project was subject to a rigorous environmental assessment made significantly stronger by our government's new interim principles for environmental assessments."

      Federal cabinet approval of Pacific NorthWest LNG will anger environmentalists and some First Nations groups. Once up and running, it expected to emit considerable amounts of greenhouse-gas (GHG) emissions, though the B.C. government has said new technologies could minimize environmental impacts.

      Last March, the Pembina Institute called attention to new calculations for air pollution associated with the development that said it could come to be responsible for more GHG emissions than any other industrial project in Canada.

      A computer rendering of the Pacific NorthWest LNG terminal proposed for a site near Prince Rupert.">
      A computer rendering of the Pacific NorthWest LNG terminal proposed for a site near Prince Rupert.

      First Nations groups have also raised concerns about the terminal’s location near Prince Rupert and fishing habitats in that area that could be adversely affected by the project.

      Petronas has still not made a final investment decision on the project. The company previously said it would wait for Ottawa’s approval and then complete a “total review”.

      The biggest LNG market in Asia is in Japan. Its Ministry of Economy, Trade and Industry recently released a report saying the average spot LNG price in Japan was US$5.40 per million British thermal units in August. That was down from US$6 in July.

      A 2013 report by Ernst and Young suggested that LNG prices would have to be in the US$12 to US$13 per BTU range "delivered" for North American LNG projects to be economically viable. This estimate was based on an analysis by Deutsche Bank and was predicated on long-term oil prices averaging US$80 to US$90 per barrel—which is far higher than the current price.


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