Pacific NorthWest LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Pacific NorthWest LNG Terminal was a proposed natural gas liquefaction facility on Lelu Island, British Columbia, Canada. It would have been developed in the District of Port Edward and on land administered by the Prince Rupert Port Authority.

Location

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Project Details

  • Owner: PNW LNG
  • Parent: Petronas, Sinopec, Japan Petroleum Exploration (Japex), China Huadian, Indian Oil, Brunei National Petroleum
  • Location: Lelu Island, Port Edward, British Columbia, Canada
  • Coordinates: 54.2, -130.289 (approximate)
  • Capacity: 21 mtpa, 3.01 bcfd
  • Status: Cancelled (called off in July 2017)
  • Type: Export
  • Trains: 2[1]
  • Start Year:

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Sited at Lelu Island, south of Port Edward, BC, Pacific NorthWest LNG would have been supplied gas by the Prince Rupert Gas Transmission Project, a proposed 900-kilometer pipeline. According to the company website, Pacific NorthWest LNG would liquefy and export natural gas produced by Progress Energy Canada Ltd. in northeast B.C. Both Pacific NorthWest LNG and Progress Energy are majority-owned by PETRONAS. Sinopec, JAPEX, Indian Oil Corporation and PetroleumBRUNEI are minority shareholders in the Pacific NorthWest LNG project.[2] Progress Energy, the company supplying gas to Pacific NorthWest LNG, estimates the development of Pacific NorthWest LNG is a $9 billion to $11 billion investment to build the pipeline.[3] Business Vancouver reports the entire project will cost $36 million.[4] Six major global oil companies backed the Pacific NorthWest LNG project. Malaysian oil company Petronas owned the majority stake. Petronas promised a $36 billion investment in the Pacific Northwest LNG project.[5] The minority stakeholders in the project included Japanese oil and gas company JAPEX; Chinese oil and chemical company Sinopec; China Huadian Corporation, one of China’s largest state-owned power producers; Indian Oil, India’s largest corporation and owner of half of the country’s oil refineries; and Petroleum Brunei, the national oil company of Brunei. Each of the minority stakeholders had pledged to buy LNG from the facility, but the project still lacks buyers for all of the planned 18 million metric tons of LNG it would produce annually.

Canadian Environmental Assessment Agency (CEAA) began its review of the proposed Pacific NorthWest LNG in April, 2013. The review of the LNG facility was halted five times due to different issues, including a need for further scientific information.[6]

The LNG faced another delay on March 19, 2016. The Canadian Environmental Assessment Agency' was granted an extra three months to finish an impact study.[7]

After the Canadian federal government approved the project in September 2016, the backers delayed the final investment decision until summer 2017. Though the Nisga’a Lisims government signed economic benefits agreements with both the pipeline backer and the province, a coalition of indigenous leaders, politicians, scientists, fishermen, and others has signed a declaration to protect Lelu Island and the Skeena River, BC’s second-largest salmon-bearing waterway, from industrial development such as the Pacific NorthWest LNG facility.[8]

Malaysia's Petronas announced it delayed its final decision on Pacific Northwest LNG despite speculation the project’s backers would decide spring 2017.[9]

In July 2017 Petronas and its partners said they were abandoning the project, citing in a press release "prolonged depressed [gas] prices and shifts in the energy industry".[10]

Opposition

Opponents claim approving Pacific Northwest will make it impossible for B.C. and Canada to meet new emissions reduction standards. Running the plant would release 5.28 million tons of carbon dioxide a year.[11]

New Democratic Party (NDP) leader John Horgan came out against the Pacific Northwest LNG in early 2016. The Green Party oppose LNG development in general.[9]

In November 2015 members of the Lax Kw'alaams First Nation camped at the site of the proposed LNG facility to prevent further research.

"We want to make sure nothing gets contaminated or in the way natural habitat, whether it's salmon or shellfish or eelgrass," said Clifford White, chief councillor of the Gitxaala First Nation.[12]

The Skeena Watershed Conservation Coalition and other groups have raised concerns about the risk to salmon habitat on Flora Bank, an area located next to Lelu Island, which could be impacted by the LNG port.[6]

Many in the First Nations community fear the LNG will destroy salmon nursing grounds, the foundation of traditional fishing, and aquaculture harvesting. The island sits neighbors a sandbar where tall eelgrass grows that protects juvenile salmon as they adjust from the fresh Skeena River water to the salty Pacific.[13]

The Gitwilgyoots Tribe launched their court challenge October 2016 to have the federal government’s approval of the LNG facility overturned.[13]

In January 2017 the Lax Kw’alaams Band signed an impact benefit agreement worth approximately $1 billion over 40 years.[13] The band said in 2015 that it would receive an initial payment of $28 million.The tribe asked the federal government establishes an environmental committee with First Nations members.[8]

In exchange the Lax Kw’alaams Band would support the LNG project. According to documents filed in federal court by the Gitwilgyoots Tribe on May 2017 the band council suppressed scientific research it had commissioned when the research report did not support the band’s position on the project. Members of the Gitwilgyoots Tribe also argue the band has no authority to approve the project.[13]

More than 130 scientists questioned the science behind the CEAA environmental assessment of the proposed Pacific Northwest LNG. These fish and wildlife biologists from Canada, the U.S., and Norway made their concerns in a joint letter. Of primary concern is the salmon. "You couldn't find a worse location to develop in terms of risks to fish. The CEAA report does not acknowledge that this LNG proposal is located on critical habitat of Canada's second largest wild salmon watershed", said a representative of the Skeena Fisheries Commission."The CEAA draft report for the Pacific Northwest LNG project is a symbol of what is wrong with environmental decision-making in Canada," the letter states[14]

Industry Groups

Articles and resources

References

  1. Pacific Northwest LNG Terminal , A Barrel Full, accessed April 2017
  2. "Pacific NorthWest LNG" accessed March 2, 2016.
  3. "Pacific NorthWest LNG" Progress Energy, accessed March 7, 2016.
  4. Jonny Wakefield,"Will Justin Trudeau’s emissions plans trip up Petronas LNG project?" Business Vancouver, March 18, 2016.
  5. Shawn McCarthy, "Lax Kw’alaam Band gives green light to Pacific NorthWest – with conditions," The Globe and Mail, Mar. 18, 2016.
  6. 6.0 6.1 "Pacific NorthWest LNG plan review resumes after long delay" Brent Jang, Globe and Mail, December 20, 2015.
  7. David Ljunggren, Julie Gordon, and Emily Chow,"Huge Petronas Canada LNG project runs into further delays" Reuters, March 19, 2016.
  8. 8.0 8.1 "Mapping BC's LNG Proposals: Twenty projects stall as provincial government’s liquefied natural gas ‘gold rush’ busts," Sightline Institute, March 2017 (contains further footnotes in text)
  9. 9.0 9.1 Clark Williams-Derry, "Why Has BC’S LNG Industry Stalled?," Sightline, June 28, 2017.
  10. Natalie Obiko Pearson, "Petronas cancels Canada LNG project, citing 'prolonged depressed prices,'" The Age, July 26, 2017
  11. Jonny Wakefield,"Will Justin Trudeau’s emissions plans trip up Petronas LNG project?" Business Vancouver, March 18, 2016.
  12. "Lelu Island LNG project divides First Nations as protest continues" Daybreak North, CBC News, November 12, 2015.
  13. 13.0 13.1 13.2 13.3 Trevor Jang, "Suppressed Science Report Questioned Location of Pacific Northwest LNG Plant," Discourse Media, June 8, 2017.
  14. "Lelu Island LNG environmental assessment questioned by 130 scientists" CBC News, March 09, 2016.