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Exxon pledges to work with First Nations on B.C. LNG terminal

Exxon Mobil Corp.’s proposal to spend up to $25-billion to export B.C. liquefied natural gas will hinge in part on having First Nations support the West Coast Canada LNG project, or WCC LNG, planned for Tuck Inlet near the community of Prince Rupert.

Jonathan Hayward/THE CANADIAN PRESS

Exxon Mobil Corp. is vowing to consult with an array of aboriginal groups in a bid to win their backing for a major LNG terminal in British Columbia.

The U.S. energy company's proposal to spend up to $25-billion to export B.C. liquefied natural gas will hinge in part on having First Nations support the West Coast Canada LNG project, or WCC LNG, planned for Tuck Inlet near the community of Prince Rupert.

"These potential aboriginal rights include, but may not be limited to, fishing, hunting, trapping and gathering activities for food, trade, ceremonies, medicines and materials," WCC LNG said in a 141-page report to the B.C. Environmental Assessment Office.

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Addressing concerns from First Nations "will be an important element of the environmental assessment," according to WCC LNG, which is owned by Irving, Tex.-based Exxon and its Canadian affiliate, Imperial Oil Ltd.

WCC LNG has been holding talks with the Lax Kw'alaams, Metlakatla, Kitselas, Kitsumkalum and Gitxaala, including more detailed discussions with the Lax Kw'alaams and Metlakatla.

"The engagement with local stakeholders, particularly First Nations, is critically important to us," Imperial Oil spokesman Pius Rolheiser said in an interview Monday.

The size of the footprint of the LNG project will depend on whether the Exxon-Imperial team selects a barge-based marine facility or an onshore terminal in northwestern British Columbia. While the terminal and shipping routes would be within the traditional territories of five aboriginal groups, "potential project-related and cumulative effects to any aboriginal community will be considered in the assessment," WCC LNG said in its report.

Up to 50 hectares of land would be required for a design that features imported barges on Tuck Inlet, while roughly 400 hectares are envisaged should an onshore terminal (including some imported modules) be built instead. Up to 6,000 construction workers might be needed at the peak, but closer to 1,000 people required under the barge option, industry experts say. A final investment decision could be made in late 2017, though it might extend into 2018 if there are unresolved issues.

Between 250 and 300 plant workers are to be hired for the terminal's planned opening in 2024, and up to 150 contractors helping with operations.

The B.C. Ministry of Natural Gas Development welcomed Exxon's strategy to export LNG from the Prince Rupert area. "WCC LNG has taken a major step by submitting a project description," a ministry spokeswoman said in a statement. "We look forward to WCC LNG's continued advancement as one of the projects proposed for development in British Columbia."

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WCC LNG chose Tuck Inlet over potential spots such as Grassy Point, located north of Prince Rupert, and also eliminated four sites near Kitimat.

There are 18 proposals to export LNG from British Columbia, but no project has rendered a final investment decision yet.

One of the projects still in the hunt, Aurora LNG, is led by Beijing-based CNOOC Ltd.'s Nexen unit. Last week, Aurora LNG withdrew its application to export from Grassy Point because it wants to focus on building a terminal near Prince Rupert Airport on Digby Island.

B.C. Natural Gas Development Minister Rich Coleman said in a recent interview that Aurora LNG is banking on Digby Island as the site for an LNG terminal, noting that Nexen officials "didn't like some of the geology at Grassy Point."

In the race to export B.C. LNG, the key players in the Prince Rupert region are Petronas-led Pacific NorthWest LNG, WCC LNG and BG Group PLC, while Kitimat is the proposed site for a project led by Chevron Corp. and another headed by Royal Dutch Shell PLC.

Rankings last October by trade publication World Gas Intelligence placed WCC LNG in eighth spot among B.C. LNG projects most likely to succeed.

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Industry observers say Exxon is now positioned to make up ground on Pacific NorthWest LNG, which is still widely viewed as the front-runner in B.C.'s fledgling LNG sector. Malaysia's state-owned Petronas and Britain-based BG Group PLC have delayed decisions on whether to forge ahead with their competing ventures near Prince Rupert.

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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