The regulatory and engineering review process for the proposed Kitimat LNG project can begin, following a March 16 agreement that establishes the British Columbia Oil and Gas Commission as the facility's official regulator.
Moving the 1.4-Bcf/d export project one step forward, the governments of Canada and British Columbia signed an interim regulatory agreement with the Haisla Nation and KM LNG Operating General Partnership, according to a statement from Aboriginal Affairs and Northern Development Canada. The parties described the agreement as an important milestone for the project's development, representative of cooperation between the governments, companies and native group.
Not only is the agreement the first step toward the commission's regulatory and engineering review, but it also enables the project to move forward while regulations are established under a federal act dealing with First Nations economic development. The First Nations Commercial and Industrial Development Act enables a native group that has decided to pursue a large-scale on-reserve project to ask the Canadian federal government to develop regulations that apply to that specific circumstance. The intended result is to re-create the applicable provincial regulations for the on-reserve project in balance with the government's obligations to First Nations.
"Helping First Nations take advantage of strategic economic development partnerships, such as this LNG facility, is one way our government is working to create Aboriginal employment on reserve," John Duncan, minister of Aboriginal Affairs and Northern Development, said in a statement. "I congratulate the Haisla Nation for its visionary approach to pursuing opportunities that will strengthen their community and the region's economy as a whole."
KM LNG, owned by Encana Corp., EOG Resources Inc. and Apache Corp., is on track to have firm commitments by the end of this year from Asia-Pacific companies interested in purchasing LNG from the Kitimat terminal.
Copyright 2012 SNL Financial LC. All Rights Reserved.
(Originally published March 21, 2012, in SNL Daily Gas Report.)