The dust has not yet settled on the $14.5 billion Coastal GasLink pipeline construction project, and regulators are turning their attention to another multibillion-dollar B.C. natural gas pipeline proposal.
The Prince Rupert Gas Transmission (PRGT) pipeline and its associated Ksi Lisims LNG project north of Prince Rupert are shaping up to be B.C.’s next energy mega-projects, at a scale similar to the Coastal GasLink (CGL) pipeline and $18 billion LNG Canada project in Kitimat.
With an estimated capital cost of $9.4 billion, Ksi Lisims—a floating LNG plant—would produce 12 million tonnes of liquefied natural gas annually (compared to LNG Canada’s 14 million tonnes). It does not yet have an environmental certificate, and is still making its way through the BC Environment Assessment Office (EAO) review process.
The pipeline that would feed Ksi Lisims with natural gas—the PRGT—received an environmental certificate in 2014, but is now back at the BC EAO for an amendment to its original environmental certificate. Early work is expected to start August 24, on a portion of the pipeline that transects Nisga’a First Nation treaty lands, in order to meet the “substantial start” requirements of the PRGT’s environmental certificate.
A fairly significant route change at the westernmost end of the 900-kilometre pipeline is needed, so the project is now the subject of a BC EAO “mini environmental assessment,” which includes a one-month public comment period that started August 1.
As the builders of the Trans Mountain pipeline expansion and CGL pipeline could attest, building a pipeline across B.C. is practically guaranteed to be an exercise in capital cost overruns, political polarization, legal challenges, and environmental and Indigenous activism.
The PRGT project is a joint venture between the Nisga’a First Nation and Texas-based Western LNG. The route cuts through territories of 21 First Nations.
The fact that Nisga’a is an equal partner in the pipeline is no guarantee the venture won’t experience the same kind of opposition faced by CGL.
“I think just like every other project in B.C. now, it’s all going to come down to whether or not they can get the provincial government to address Aboriginal issues,” said Ellis Ross, BC United’s MLA for Skeena and former chief of the Haisla First Nation, which is the majority owner of the Cedar LNG project.
Gitanyow hereditary chiefs have already begun to telegraph objections to the PRGT, despite the fact the Gitanyow were among the First Nations to sign a project agreement in support of the project in 2015.
This is similar to what transpired with CGL: Benefits agreements were signed by several elected band councils and chiefs of the Wet’suwet’en, but the project was vigorously opposed by several Wet’suwet’en hereditary chiefs.
The Gitanyow has had territorial disputes with the Nisga’a in the past. In a recent news release, Gitanyow hereditary chiefs said the PRGT pipeline project “exacerbates historical tensions between the Nisg瘫a’a Nation and the Gitanyow.”
The pipeline “crosses Gitanyow Nation territories, creating conflicts,” the chiefs said in the release, adding: “This development poses environmental risks and challenges to Indigenous sovereignty in British Columbia.”
Karen Ogen, CEO of the First Nations LNG Alliance and former elected chief of the Wet’suwet’en First Nation band council, said her alliance wants to do a post-mortem on CGL to help industry understand and avoid some of the pitfalls that project encountered, and highlight some of the project’s benefits to First Nations.
She noted that the benefits agreements signed with CGL have 25-year terms.
“We want to do research that narrows in specifically with the nations on what they thought worked for the Coastal GasLink project, what didn’t work and how they could do things differently, because I see more major projects on the horizon in the northern territories,” Ogen said.
She added that First Nations communities that signed benefits agreements with CGL—including her own—are seeing economic benefits flow from the pipeline.
“The nations now are reaping the benefits from agreements signed with the company and with the province,” she said. “I can say for my home community that we have more housing now. We have clean drinking water being brought to our community. I can safely say that our community is flourishing with these agreements.”
When the PRGT project received its environmental certificate in 2014, it was owned by TC Energy (TSX,NYSE:TRP) and was tied to the Malaysian oil and gas giant Petronas’ Pacific NorthWest LNG project, which was proposed for Lelu Island near Prince Rupert. When Petronas abandoned the venture in 2017, the associated PRGT pipeline project became dormant.
It was only recently resurrected to supply natural gas to the Ksi Lisims LNG facility, which will be located on fee-simple land owned by the Nisga’a. The Nisga’a and Western LNG acquired PRGT from TC Energy in June.
The pipeline’s original route would have taken it 900 kilometres from Hudson’s Hope in northeastern B.C. to Lelu Island, just south of Ridley Island near Prince Rupert.
But Ksi Lisims LNG will be located roughly 80 kilometres north of Lelu Island, at the northern tip of Pearse Island. This will require a rerouting of the westernmost portion of the pipeline. The new route will shave about 100 kilometres off the marine portion of the pipeline as originally proposed.
On August 1, Western LNG announced it had selected Bechtel, an American engineering and construction company, to build the pipeline. Betchel has built pipelines in Alaska, Peru, Egypt and Australia, and the associated pipeline network for the Sabine Pass LNG complex in the U.S.
“As a firm renowned for its expertise in engineering and construction management, we are confident in Bechtel’s ability to get the job done right,” said Western LNG CEO Davis Thames. “From the Hoover Dam to the Chunnel to NASA’s shuttle launch pad, they have earned trust delivering complex projects that stand the test of time.”
“There’s absolutely no doubt that Bechtel is the world leader in this space,” said Rebecca Scott, senior manager of communications for Western LNG. “We’re bringing on the best of the best to do this job.”
PRGT’s environmental certificate—which has now been extended twice —expires in November, unless the project’s owners can demonstrate the project has substantially started.
So even though the Ksi Lisims project has yet to itself receive an environmental certificate, Western LNG and the Nisga’a plan to start early work on the pipeline this month. This will include clearing and grading a 45-kilometre section on Nisga’a treaty land, creating a new laydown yard and building a 200-person work camp. The work will be limited to Nisga’a treaty lands. The initial workforce will be 50 workers ramping up to about 200 in October and November.
“PRGT will take a lot longer to build than a floating LNG facility, so we need to start the pipeline now because it will be a four-year build, whereas the LNG facility is a two-year build,” Scott said.
Scott added that the benefits agreements originally signed with First Nations along the pipeline route will be honoured and refreshed. Nations will also be offered the opportunity to take equity positions in the pipeline. This will include First Nations whose core territory will be bypassed because of the reconfigured pipeline route.
“Any nation who has a project agreement will continue to have a valid project agreement regardless of the pipeline’s rerouting,” Scott said. “We’ll actually go further on that and say, in addition to the equity offering, we’re also going to be updating those project agreements.
“Those project agreements will be updated to reflect new procurement information (and) inflationary changes. Our rerouting will not negatively impact any economic opportunities in any of the nations.”
