British Columbia Seeks to Spur LNG With Haisla Agreement

The British Columbia government agreed to lease or sell 700 hectares (1,730 acres) of land to the Haisla First Nation to help speed development of a liquefied natural gas terminal.

The agreement gives the Haisla, an indigenous Canadian group, access to waterfront land in an area where other LNG export terminals have been proposed, the government said in statement today. The Haisla are partners in one of the province’s LNG export projects and have rented out some of their land for another terminal.

The deal “has the potential to fast-track a major LNG facility in the Kitimat area,” Ida Chong, the province’s minister of aboriginal relations and reconciliation, said at a press conference in Vancouver. It also encourages the participation of the Haisla in LNG development.

The government sees as many as seven LNG export projects in British Columbia, with the first built as soon as 2015, said Rich Coleman, the provincial Minister of Energy, Mines and Natural Gas. British Columbia is seeking ways to liquefy and export its gas via tankers to Asian markets, where prices are higher than in North America.

Apache Corp. (APA), Encana Corp. (ECA) and Royal Dutch Shell Plc (RDSA) are among the companies that have proposed gas export terminals in British Columbia, which holds an estimated 200 trillion cubic feet of the fuel in shale formations.

‘Market Value’

The Haisla will pay the provincial government “market value” rent for the land, near their reserve, Chong said. A purchase price would be negotiated later, she said.

The group currently has a 50 percent stake in the proposed Douglas Channel Energy Partnership with LNG Partners LLC, a closely held Houston-based company. The Douglas Channel project includes a barge-based liquefaction plant near Kitimat, British Columbia, that would convert about 125 million standard cubic feet of gas a day.

The Haisla already have an agreement to lease land to Apache, which is considering building the Kitimat LNG project with its partners Encana and EOG Resources Inc. (EOG) Under today’s agreement, the group may offer access to the additional land to Apache, Shell or other LNG developers, said Ellis Ross, Haisla Chief Councilor.

Apache’s project may beat rivals including Shell to become the first to export LNG from Canada’s Pacific Coast by 2016, British Columbia Premier Christy Clark said on Sept. 12. The company said in June first production from Kitimat may be in 2017.

Asian gas consumers are paying at least five times as much as buyers in North America for gas, Coleman said.

“Right now, Japan is most interested in receiving more exports of liquefied natural gas,” Chong said. “South Korea is also interested and we’ve also heard China and India are two large emerging markets.”

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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