BC LNG licence OK’D

The National Energy Board has approved BCLNG EXPORT Co-operative’s application for a liquefied natural gas export licence, signalling an acceleration of the nascent industry in Canada.

The co-operative, a partnership between family-owned LNG Partners of Houston, and British Columbia’s Haisla First Nation, would ship 36 million tonnes of super-cooled natural gas over 20 years from a floating terminal off Kitimat, B.C. to Pacific Rim export markets.

The volume would be equivalent to approximately 125 million cubic feet per day from the planned $450-million facility.

“This puts us in a position to get on with the project and keeps us in line with our expected timeline to produce first LNG in the first quarter of 2014,” said Tom Tatham, managing partner of LNG Partners, on Thursday.

Natural gas producers in Western Canada are keen to tap into new, more lucrative markets for the abundant resource, currently priced i n Nor t h America at less than half of the value of its liquefied form in energyhungry Asian countries.

Liquefied natural gas fetches about $14-$16 U.S. per million British thermal unit in Asian markets, a tidy profit when priced off the $8 U.S. it would cost to deliver the fuel from Canada, said Tatham.

The board’s approval was the second export licence in Canada’s history.

“In approving BC LNG’S application, the board satisfied itself that the quantity of gas to be exported is in excess of the requirements to meet the foreseeable Canadian demand,” the agency said in its approval statement.

In October the national regulator approved a 20-year export licence for the Kitimat LNG project, proposed by Apache Canada, EOG Resources Canada and Encana Corp., which would process 700 mmcf per day of natural gas at a $4.5-billion export terminal.

“The NEB knows we have lots of gas and definitely need to get as serious about exporting natural gas to multiple markets as some people, whether it is the prime minister, Enbridge or Suncor, feel about the need to diversify our oil markets,” said Steve Paget, analyst with First energy Capital Corp. “The diversification of our gas markets is moving under the radar and we are going to end up becoming a serious LNG exporter with pretty much everyone involved not having a problem with it.”

The project is unique as a cooperative of natural gas producers, marketers and buyers which will submit bids to either provide gas to be liquefied or buy the product. It also will process the gas on a liquefaction facility anchored offshore Kitimat.

This puts us in a position to get on with the project. TOM TATHAM, MANAGING PARTNER OF LNG PARTNERS