$4B Kitimat LNG project submitted for environmental review

A $4-billion plan for a pipeline and liquefied natural gas export terminal by Shell Canada Ltd. for Kitimat, B.C., has been submitted to federal and provincial environmental regulatory agencies.

Shell's proposal, which is now among at least a half-dozen LNG developments in the province, includes building a natural gas pipeline from northeastern B.C. to the northern coast where the liquefied gas will be loaded on tankers and shipped to Asia.

"Project construction is expected to start in 2015, pending receipt of the necessary regulatory approvals, with construction of the first phase to be completed in 2019/2020," said the 27-page project description summary document sent to the regulatory agencies.

"The life of the project is expected to be a minimum of 25 years with operations continuing until decommissioned in 2045 or later."

The LNG Canada project is a venture between Shell and affiliates of Asian companies Mitsubishi Corp., Korea Gas Corp., and PetroChina Investment Ltd.

The project plan states LNG Canada expects to produce 24 million tonnes of liquefied natural gas annually, or processing about 69,000 tonnes of LNG daily.

LNG Canada proposes to build a marine terminal on about 350 hectares of private land located within the District of Kitimat near the current Rio Tinto Alcan aluminum smelter.

The proposed terminal is located on the Douglas Channel and will be large enough to accommodate two LNG carrier vessels capable of transporting anywhere between 130,000 tonnes and 265,000 tonnes of LNG each.

The project plan states LNG Canada expects anywhere between 170 and 350 LNG carrier visits annually.

Environmental review streamlining

The project approval process through the federal Environmental Assessment Agency and B.C.'s Environmental Assessment Office is expected to take up to two years.

Recently, B.C.'s environment ministry asked federal environment minister Peter Kent to allow the province to undertake much of the review under a federal-provincial memorandum and regulations that seeks to streamline project approvals.

B.C. environment ministry officials said much of the environmental review work would be conducted by the province, but the project still requires approval by both agencies.

LNG Canada was granted a 25-year federal permit to export LNG last February.

The project description states environmental effects from the proposed project could impact area wildlife, including birds, fish, animals and local aboriginal peoples.

"Under the Canadian Environmental Assessment Act 2012, the project description must address the potential for changes to fish and fish habitat, aquatic species, and migratory birds, as well as potential for environmental changes on federal lands and effects of environmental changes on aboriginal peoples," states the project description.

The project description said the Kitimat River estuary area near the proposed project site is home to a wide variety of wildlife, birds, fish and amphibians, including grizzly and black bears, song birds and sea birds and toads and salamanders.

There are conservation concerns of up to 16 species in the project area, the description said.

Those species include: western toad, marbled murrelet, tundra swan, western grebe, great blue heron and grizzly bear.

But the document states that "only a fraction of those species occur in the vicinity of the project."

The description also states the project's potential effects may permanently alter or destroy fish and fish habitat "through interactions between the project footprint and aquatic or riparian areas of the Kitimat River estuary channels and tributaries."

Area aboriginal peoples could face health, social, economic, social and cultural impacts due to the LNG project, including degradation of local air quality due to combustion of fossil fuels, incinerating of acid gases and potential flaring activities, the document stated

The project description also mentions the prospect of economic benefits.

The B.C. Liberal government is heralding exports of LNG to Asia as a generational opportunity the province must support.

Premier Christy Clark announced a Prosperity Fund as part of her government's throne speech in February that she said aims to embrace the trillion-dollar potential of exporting liquefied natural gas to Asia.

She said the government's proposed Prosperity Fund could accumulate between $100 billion and $260 billion in revenues from LNG royalties and business taxes, enough to wipe out the province's current debt of $56 billion and possibly eliminate the need for a provincial sales tax.