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Natural Gas Industry Now A Liquid Asset

For a long time - two provincial election cycles have used it as a foundational issue - the promise of Liquefied Natural Gas (LNG) has been piped into the minds of British Columbians.
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For a long time - two provincial election cycles have used it as a foundational issue - the promise of Liquefied Natural Gas (LNG) has been piped into the minds of British Columbians.

There have been 18-or-so proposals on the government books - companies suggesting their version of moving the northeast's natural gas reserves across the land to shipping facilities on the north coast.

The first one out of the gate with a final investment decision to go forward was the LNG Canada partnership (a collection of proponents led by Shell, also including Petronas/North Montney LNG, PetroChina, Mitsubishi/Diamond LNG, and Korea Gas/Kogas Canada).

As will all LNG projects, the whole proposal is made up of three parts: extraction infrastructure in the northeast (LNG Canada has indicated it will utilize the Groundbirch and Cutbank Ridge gas fields near Dawson Creek), a shipping facility they have committed to build in Kitimat, and a pipeline between the two.

LNG Canada chose Coastal GasLink (CGL - a subsidiary of TransCanada) in 2012 as their pipeline construction and operation partner. The pipe is slated for a 670km route.

In 2017, due to concerns expressed by the Wet'suwet'en First Nation, the route was altered for a patch south of Houston to veer away from culturally sensitive areas.

"These productive, two-way conversations with all Indigenous groups have resulted in many changes to the project," said a CGL official.

Once Coastal GasLink re-earned the approval of environmental assessment officials for the new route, the plan was back on track.

It was made the centre of a protest effort, however. A small but vocal community within the Wet'suwet'en First Nation took up a position that became headline news this winter when they refused to yield to pipeline workers.

RCMP were forced to execute arrests.

The protestors, acting on behalf of a minority number of Wet'suwet'en hereditary chiefs within that ancient First Nation, behaved with restraint in making their point in that altercation. It was not violent the way past industrial opposition has been in B.C.'s past, but it made headline news.

Rick Gateman, president of CGL, issued a statement soon after the arrests south of Houston.

"The outcome of the impasse at the Morice Bridge River crossing is not one we wanted. Instead, we have always strived to have an open, honest conversation about how to resolve this issue. It's unfortunate that RCMP were forced to take this action to ensure the re-establishment of lawful access to this public bridge and road that leads to our pipeline right of way.

"We respect the rights of individuals to peacefully express their point of view, as long as their activities do not disrupt or jeopardize the safety of the public, our employees, our contractors, and even themselves.

"There is nothing more important to us than that. Our only goal was and is access to the bridge and public road so our teams can travel to our pipeline right of way one kilometre away from the camp. Construction and pre-construction will not impact the camp. In fact, the camp can continue with its activities. Our pipeline right of way isn't near the camp, and does not overlap or directly affect it."

We took legal action as a last resort and only after six years of unsuccessful efforts to find a mutual solution. We remain committed to keeping the lines of communication open."

The companies involved in the entirety of the project point out that hundreds of millions of dollars have been invested in Aboriginal jobs, communities and education programs. Hundreds of millions more are pending, once construction and operation are underway.

They also point out that the process could not have gotten this far were it not for majority-based membership decisions in each of the First Nations along the route.

While she stressed that she does not speak for CGL, Susannah Pierce is the external affairs director for LNG Canada and in an exclusive interview with Citizen-Industry & Trades, she said she wouldn't be afraid to talk about the protest and the pathway to success for the project.

"I do think I will spend a little bit of time talking about the unprecedented support we do have, and despite what we've seen recently with the five hereditary chiefs of the Wet'suwet'en, the support for the project is still unprecedented," she said. "It's been unfortunate to see how that opposition has translated into something which is not representative of the broad support of the project."

Pierce and LNG Canada CEO Andy Calitz were both in Prince George for the TrueNorth Business Development Forum and the BC Natural Resources Forum. Each of them, in their public comments during these events, made procurement and the upcoming economic infusion for northern B.C. part of their key topics.

"There is a whole host of different small contractors to individual tradespeople, for whom there is opportunity to work on-site," Pierce said. Much work is already underway, doing preliminary setting of the sites, but principal construction is yet to get underway. "Coastal GasLink will obviously be doing a lot more along the pipeline route, and they have already announced they've put in $20-million worth of First Nations contracting opportunities, which is a big deal, huge deal, actually."

The CGL portion alone of the three-part project represents an investment of $6.2-billion. The construction phase is anticipated to generate 2,500 jobs.

The Kitimat shipping facility, where the natural gas will be processed into liquefied form and transferred onto specialized ships for overseas markets, will be an even bigger investment, with more construction jobs and long-term operations jobs as well.

It is a $40-billion overall investment. Prime minister Justin Trudeau called it "the single largest private sector investment in the history of Canada."

B.C.'s minister of energy, mines and petroleum, Michelle Mungall, estimated the aggregated employment footprint of the project at 10,000 jobs, most of them in northern B.C., and the provincial revenue to be in the neighbourhood of $23-billion.

"Making the final investment decision was more significant than I ever imagined, in terms of how difficult it was to get there," said Pierce. "When you go into this next phase which is really about how we build it, it is actually, in some ways, more difficult. Our executive vice-president of integrated gas and new energy, Martin Wetselaar of Shell, said getting to a final investment decision was a lot like a moon landing and building it was like getting your people back. With that, it's how we live up to our commitments that we have with all our stakeholders, making sure it is on time and on budget, but also with communities so we are working in a way that makes them comfortable with the construction, that they are comfortable with the operations, that we live up to our commitments with them, as well as First Nations."

The liquefied natural gas is expected to sail out of Kitimat from the LNG Canada facility starting in 2025.