LNG project signs second long-term deal while province reviews costly pipeline's future
TotalEnergies has entered a 20-year agreement to purchase two million tonnes per year of liquefied natural gas (LNG) from the proposed Ksi Lisims LNG project on British Columbia’s north coast, as reported by The Globe and Mail.
The facility, backed by the Nisga’a Nation, has a planned production capacity of 12 million tonnes per year.
BNN Bloomberg reports that this marks the second offtake deal for Ksi Lisims, following a 2023 agreement with Shell Eastern Trading Pte Ltd. to also acquire two million tonnes annually over two decades.
In conjunction with the LNG purchase agreement, TotalEnergies acquired a five percent stake in Western LNG, which is co-developing Ksi Lisims and the associated pipeline project.
According to The Globe and Mail, the French company has also secured an option to raise its stake in Western LNG or take a direct 10 percent stake in the facility upon final investment decision.
Ksi Lisims is being developed by a partnership including the Nisga’a Nation, Western LNG, and Rockies LNG Partners.
As reported by CBC, Western LNG president Davis Thames stated that TotalEnergies’ investment adds valuable experience in development and operations as the project moves toward a final investment decision later this year.
The project is being jointly developed by the Nisga’a Nation, Western LNG, and Rockies LNG Partners.
Ksi Lisims submitted its application for an environmental assessment certificate to the British Columbia government in October 2023.
Its proponents expect the facility to be operational by 2029 if approved in 2025, with LNG to be exported to Asia using floating production units built in South Korea and stationed at Pearse Island.
However, the project’s future depends on the status of the Prince Rupert Gas Transmission (PRGT) pipeline, which would transport natural gas from northeast BC to the facility.
PRGT was initially approved in 2014 with an environmental assessment certificate and received a five-year extension in 2019. That certificate expired in late 2024 unless substantial construction had begun.
As per The Globe and Mail, the BC Environmental Assessment Office has issued a 24-page draft report indicating that PRGT’s projected capital costs have risen to between $10bn and $12bn, more than double the initial $5bn estimate from 2014.
The regulator’s report was prepared to guide Environment Minister Tamara Davidson, who may delegate the decision to chief executive assessment officer Alex MacLennan.
The Nisga’a Nation and Western, who co-own PRGT, hope for a positive ruling that will enable an extension of the certificate for the life of the project.
The pipeline was originally designed to span nearly 900 kilometres to Lelu Island near Prince Rupert for a cancelled Petronas-led LNG venture.
Current plans propose a 750-kilometre route to Pearse Island.
PRGT reported in a 90-page 2024 filing that it has invested nearly $584m in the pipeline, including $70m in 2024 for activities such as clearing 42 kilometres of right-of-way, building nine bridges, and improving access roads.
In mid-2024, TC Energy sold PRGT to the Nisga’a and Western.
The pipeline faces opposition from Gitanyow hereditary chiefs and Gitxsan Nation leaders, whose traditional territories would be crossed by the route.
Tara Marsden, Gitanyow’s sustainability director, said PRGT has not demonstrated a substantial start as required.
Ecojustice, representing the Kispiox Band and community groups, has filed a petition in BC Supreme Court challenging the BC Energy Regulator’s decision to allow PRGT construction on a segment of Nisga’a territory identified as Section 5B.
The groups petitioning the court argue that the BCER split Section 5 into subsections 5A and 5B to permit construction that they claim lacks adequate justification.
Environmental and advocacy groups opposing PRGT include the Skeena Watershed Conservation Coalition, Wilderness Committee, David Suzuki Foundation, Dogwood, Stand.earth, Sierra Club and Northwest Institute.
Janelle Lapointe, a senior adviser at the Suzuki Foundation, warned that moving forward with PRGT could lead to conflict, referencing past protests linked to the Coastal GasLink pipeline project.
That project, which supplies gas to LNG Canada’s export terminal in Kitimat, BC, also faced opposition and national demonstrations in 2020.
Coastal GasLink, operated by TC Energy, was the first natural gas export pipeline across northern BC PRGT aims to become the second.
