LNG Canada Granted 40-Year Gas Export Licence

Canada’s National Energy Board (NEB) has approved the application of LNG Canada Development Inc. (LNG Canada) for a 40 year natural gas export licence with a maximum term quantity of 1494 billion cubic metres.

This is the first 40-year natural gas export licence approved by the NEB since the amendment to the National Energy Board Act in June 2015 as well as the corresponding regulations.  Previously, the maximum term length was 25 years.

When evaluating natural gas and LNG export licence applications, the NEB considers if the quantity of natural gas proposed to be exported is surplus to Canadian requirements, taking into account trends in the discovery of gas in Canada.

“The NEB has determined that the quantity of natural gas proposed to be exported by LNG Canada is surplus to Canadian needs. The NEB is satisfied that Canada’s gas resource base, and the overall gas resource base in North America, is large and can accommodate reasonably foreseeable Canadian demand.  This demand would include the LNG exports proposed by LNG Canada as well as a plausible potential increase in Canadian demand,” NEB said.

The approved export point is at the outlet of the loading arm of the natural gas liquefaction terminal to be located near Kitimat, British Columbia.

LNG Canada is a joint venture company comprised of Shell Canada Energy (50%), an affiliate of Royal Dutch Shell plc, and affiliates of PetroChina (20%), Korea Gas Corporation (15%) and Mitsubishi Corporation (15%).

The joint venture is proposing to build an LNG export facility in Kitimat that initially consists of two LNG processing units referred to as “trains,” each with the capacity to produce 6.5 million tonnes per annum of LNG annually, with an option to expand the project in the future to four trains.

LNG Canada announced earlier this week that the BC Oil and Gas Commission (OGC) issued an LNG Facility Permit for the project, one of the key permits required for the construction and operation of the proposed LNG Canada project.

The issuance of the export licence is subject to the approval of the Governor in Council.

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