Regulator OK's liquefied natural gas exports through Hudson Bay, pending future compliance

Canada's energy regulator has granted a company trying to develop a second port on Hudson Bay in northern Manitoba the authorization to export liquefied natural gas through subarctic waters, provided it complies with energy regulations.

In an order published May 29, the Canada Energy Regulator authorized NeeStaNan to export LNG until June 2027, allowing the company to embark on a feasibility study for an all-season port near the mouth of the Nelson River.

Originally based in Calgary, where it was directed by former oilpatch entrepreneur Robyn Lore, NeeStaNan now states it is a majority-owned subsidiary of Fox Lake Cree Nation, which is located along the Nelson River east of Gillam, Man. The company now has a Winnipeg address.

In a news release issued on July 2, NeeStaNan and Fox Lake Cree Nation announced they are studying the feasibility of building "a large, multi-functional port with year-round operations," with the capacity and infrastructure to handle ores, potash, grains, liquefied natural gas, liquefied petroleum gas and hydrogen.

The proposed port would be served by a new 150-kilometre rail spur line from Gillam to Hudson Bay, NeeStaNan said in its press release, describing the proposed tidewater port as a "new Port Nelson."

Port Nelson, a ghost town located along the north side of the Nelson River, was the original intended terminus for the Hudson Bay Railway.

From 1912 to 1918, the federal government attempted to build a deepwater port along the Nelson but abandoned the megaproject because of wartime labour shortages, the extreme climate on the coast of Hudson Bay and heavy silting along the fast-flowing river.

The Hudson Bay railway was completed a decade later to Churchill, several hundred kilometres to the northwest.

NeeStaNan has spent the past two years studying a revival of Nelson River-area port.

Proponents such as Churchill ecotourism operator Wally Daudrich have argued the Port of Churchill is too small to serve a large volume of container ships, while Manitoba Premier Wab Kinew has said Churchill cannot be expanded without impacting ecotourism operations, including beluga whale watching and polar bear viewing.

'Trying to do our homework' on port proposal: Kinew

NeeStaNan said in its press release that in addition to exploring the construction of a rail line, it is also looking at a pipeline to a future Port Nelson.

Environmental groups and some First Nations advocates have expressed concerns Hudson Bay is too ecologically sensitive to handle fossil fuel shipments, given the remote location of the bay, the length of time it would take to deploy cleanup crews, and the absence of knowledge about the impacts of oil or gas spills in this ecosystem.

Kinew, who has expressed support for the idea of a second port on Hudson Bay, suggested it is premature to conclude the NeeStaNan proposal will translate into the construction of an actual port, which would require billions in spending.

"We're trying to do our homework and background work behind the scenes, make sure folks are comfortable with the direction forward, and then we'll move ahead with that," the premier told reporters Thursday at the Manitoba Legislative Building.

"We haven't actually done an announcement of this thing yet," Kinew said. 

"We're doing the legwork to try and get ready and make sure that the partners that we need to have onside have their concerns around ownership and decision-making and the environmental aspects all looked after.

"When we feel like things are in a good place and all the partners are ready to move forward, then you'll definitely hear more from us."