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    Ksi Lisims LNG considering controversial pipeline to deliver feed gas [UPDATE]


The 12mn tonnes/year FLNG project on BC's northern coast has identified Prince Rupert Gas Transmission as its preferred feed gas pipeline. [UPDATEs with comments from Michael Sawyer] [Image credit: Ksi Lisims LNG]

by: Dale Lunan

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Ksi Lisims LNG considering controversial pipeline to deliver feed gas [UPDATE]

Ksi Lisims LNG, which is proposing to develop a 12mn tonnes/year floating LNG (FLNG) terminal on Nisga’a Nation lands north of Prince Rupert, is considering TC Energy’s dormant Prince Rupert Gas Transmission (PRGT) pipeline to deliver feed gas to the terminal.

In an application for an environmental assessment certificate (EAC) filed with the BC Environmental Assessment Office (EAO) on October 16, Ksi Lisims LNG says it has entered into an agreement with TC Energy to conduct work on the PRGT project that would preserve existing regulatory permits, prepare potential amendments that would allow for the delivery of gas to the Ksi Lisims LNG site on Pearse Island and develop work plans for the next phase, “subject to further agreements being entered into."

“To accommodate an amended marine pipeline route with a delivery point at the site, an amendment to the PRGT EAC would be necessary,” Ksi Lisims LNG says in its application to the BC EAO. “While specific details regarding TC Energy’s efforts and the timeline for the EAC amendment were not known at the time of writing (October 2023) it is expected that the amended route will consist of two shorter subsea pipelines diverging from the currently approved route and terminating at the site.” 

The original 900-km PRGT, which has a BC EAC valid until November 2024, was intended to serve the planned Pacific NorthWest LNG facility on Lelu Island near Prince Rupert. Its route would have crossed northern BC to a point near Pearse Island, where it would then continue as a subsea pipeline south to Lelu Island.

Malaysia’s Petronas advanced the 12mn tonnes/year terminal in 2013 and earned provincial environmental approvals in 2015, alongside the pipeline approval. 

The LNG project received federal environmental approvals in 2016 but after numerous delays, Petronas shelved the project in 2017 and acquired a 25% stake in the Shell-led LNG Canada project, which will be served by the Coastal GasLink pipeline, another TC Energy endeavour.

The cancellation of Pacific NorthWest LNG short-circuited a regulatory roadblock which at the time might have significantly delayed the pipeline project.

Environmental consultant Michael Sawyer challenged that because PRGT would connect with TC Energy’s NOVA Gas Transmission Limited (NGTL) system spanning the Alberta-BC border, it should have been reviewed by Canada’s National Energy Board (NEB), the predecessor to the current Canada Energy Regulator (CER).

“I still think I have a completely legitimate argument on the jurisdictional question,” Sawyer told NGW in a phone interview. 

Sawyer made the same claim to the NEB with regard to the CGL project in 2018 but was ultimately unsuccessful in forcing its review at the federal level because the CER could not establish with certainty CGL’s connection to the NGTL system.

“I’m going to be filing within the next two months an application with the CER to review their decision based on new facts,” Sawyer said. “The new facts are that there is a direct connection to a federally-regulated pipeline at over 140% of the capacity of Coastal GasLink.”

Sawyer said the same jurisdictional issues still apply to PRGT, which as originally conceived would have tied directly to NGTL’s North Montney Mainline, a federally-regulated system approved by the NEB in 2015.

“I’m going to run that same argument up the flagpole and it’s essentially going to be concurrent with the same argument being re-run up with respect to Coastal GasLink,” Sawyer said.

A TC Energy spokesman said the PRGT’s potential participation in the Ksi Lisims LNG project is in early days.

“As indicated in its application, Ksi Lisims has contracted TC Energy to preserve our permitted Prince Rupert Gas Transmission project as the potential natural gas delivery corridor,” the spokesman said in an email to NGW. “At this preliminary stage, we are focused on evaluating regulatory and future options, which would be subject to further agreements being entered into. No final investment decisions have been made.” 

Ksi Lisims LNG, meanwhile, says its application for an EAC marks the end of its application-led development phase and the start of the EAO’s application review phase.

Under a substitution agreement with the federal government, the EAO will conduct an environmental review under the BC Environmental Assessment Act, the federal Impact Assessment Act and the Nisga’a Treaty.

The filing of the EAC application, Ksi Lisims LNG said in a statement, starts a statutory 180-day clock for review and comment by stakeholders, after which Ksi Lisims will refile an amended, final application. The EAO will then have 150 days to consider the application and make recommendations to both the provincial and federal governments regarding the issuance of an EAC.

“Ksi Lisims LNG will be one of the most significant indigenous-supported industrial developments in Canadian history,” Ksi Lisims said. “It is expected to create thousands of direct and indirect jobs and provide substantial financial benefits to the Nisga’a Nation and to indigenous nations across BC’s northwest.”