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National Energy Board approves its first 40-year natural-gas export licence for LNG Canada

A truck drives past LNG Canada signage in Kitimat, British Columbia, Canada, on Friday, June 5, 2015.

Ben Nelms/Bloomberg

The board that regulates natural-gas exploration and production in Canada has approved its first 40-year export licence to a joint-venture company led by Shell.

The National Energy Board permit will allow LNG Canada to export up to 1,494-billion cubic metres of liquefied natural gas from a terminal that will be located near the B.C. north-coast community of Kitimat.

Until the National Energy Board Act was amended in June 2015, the maximum term length of an export permit was 25 years.

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The licence must still be approved by the prime minister and his cabinet.

The announcement comes just days after the B.C. Oil and Gas Commission approved an LNG Canada facility permit, which outlines design, construction and operation requirements.

Shell Canada Energy and affiliates of PetroChina, Korea Gas Corp. and Mitsubishi Corp. are members of LNG Canada, which has not yet made a final investment decision on the project.

"We have determined that the quantity of natural gas proposed to be exported by LNG Canada, for a term of 40 years, is surplus to Canadian needs," says a letter published Thursday by the board.

"The board is satisfied that the natural gas resource base in Canada, as well as North America overall, is large and can accommodate reasonably foreseeable Canadian demand, including the natural gas exports proposed in this application, and a plausible potential increase in demand."

The board says in its letter that the licence will expire Dec. 31, 2022 unless exports have begun.

The project is one of 20 LNG proposals in B.C. Four have received environmental approval from the province, while two have been granted permission to proceed by the Canadian Environmental Assessment Agency.

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The B.C. Liberal government has staked its political future on the LNG industry, with promises of 100,000 new jobs and $100-billion in revenue over 30 years.

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