The National Energy Board (NEB or the Board) on Thursday approved an application by KM LNG Operating General Partnership (KM LNG) for a license to export liquefied natural gas (LNG) from Kitimat, British Columbia to markets in the Asia Pacific region.
The export license authorizes KM LNG to export 200 million tonnes of LNG (equivalent to approximately 265 million 103m3 or 9,360 Bcf of natural gas) over a 20 year period. The maximum annual quantity allowed for export will be 10 million tonnes of LNG (equivalent to approximately 13 million 103m3 or 468 Bcf of natural gas).
The supply of gas will be sourced from producers located in the Western Canada Sedimentary Basin. Once the natural gas has reached Kitimat by way of the Pacific Trail Pipeline, the gas would then be liquefied at a terminal to be built in Bish Cove, near the Port of Kitimat. The construction and operation of the pipeline and the terminal will require provincial regulatory decisions.
This is the first application for an LNG export license that the Board has considered since the de-regulation of the natural gas market in 1985.
In approving the application, the Board satisfied itself that the quantity of gas to be exported does not exceed the amount required to meet foreseeable Canadian demand. The exported LNG will not only open new markets for Canadian gas production, but the Board believes that ongoing development of shale gas resources will ultimately further increase the availability of natural gas for Canadians.
Prior to approving the license, the Board considered environmental and related socio-economic effects of KM LNG's application. These effects included matters related to marine shipping, and the proposed LNG terminal and Pacific Trail Pipeline.
The Board also acknowledges the potential economic benefits associated with KM LNG's project. These benefits include employment opportunities due to the development of the LNG terminal and the Pacific Trail pipeline.