Federal regulator approves expanded Kitimat LNG gas export licence

CALGARY — An application from Chevron Canada for a 40-year licence to export natural gas from the proposed Kitimat LNG project has been approved despite environmental opposition, says the Canada Energy Regulator.

The application filed last spring to the National Energy Board, the CER's predecessor, aimed to double the previously approved export licence duration and increase the potential output of the facility to 997 billion cubic feet of natural gas per year.

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That's the equivalent of about 18 million tonnes of liquefied natural gas, a substantial increase over the previous 10-million-tonne, 20-year licence which is set to expire at the end of this year.

"Chevron Canada is pleased to have received the approval of the Canada Energy Regulator for a new natural gas export licence for the proposed Kitimat LNG project," said Chevron spokesman Leif Sollid in an email.

"The new natural gas export licence covers a 40-year term and reflects the revised Kitimat LNG plant design to one that includes up to three LNG trains to deliver up to 18 million tonnes per year of LNG. The Kitimat LNG project is designed to be the world's first all-electric LNG plant powered by renewable hydroelectricity."

The project is in its pre-front-end engineering design (FEED) phase and has not yet been given the go-ahead, he added.

In its decision letter, the CER notes that it rejected an application last summer from B.C. environmentalist Michael Sawyer to restart the regulatory process and hold a public hearing.

It also rejected his argument that an adequate natural gas supply hadn't been proven, despite a Chevron expert's estimate of Canadian and North American natural gas resources of 1,000 trillion cubic feet and 4,000 Tcf, respectively.

Chevron has previously stated the increase in scope is designed to improve the project's "cost of supply competitiveness" compared with other LNG projects around the world. Its application envisions commissioning of the facility by 2029.

In the fall of 2018, the Shell Canada-led LNG Canada consortium announced it would proceed with its $40-billion, 14-million-tonne-per-year project, also to be built near Kitimat. It's expected to be in service by 2024.

This report by The Canadian Press was first published Dec. 5, 2019.

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