Canadian aboriginal group signs deal to support LNG pipeline

Thu Nov 20, 2014 11:56pm EST
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VANCOUVER (Reuters) - A Canadian aboriginal community has signed a deal with British Colombia to allow a gas pipeline to be built in its territory, setting the stage for more pacts that could bolster liquefied natural gas (LNG) export projects in the coastal province.

The province on Thursday signed a C$6 million ($5.3 million) pipeline benefit agreement with the Nisga'a Nation and said it expects to complete similar deals with other aboriginal groups "in the near future."

The Nisga'a are just one of 23 aboriginal communities that dot the proposed pipeline route, which would connect Petronas' [PETR.UL] $11 billion Pacific NorthWest LNG export terminal with gas fields in British Columbia's northeast.

The Malaysian state-owned energy company is expected to make a final investment decision on its LNG project before year end. The Prince Rupert Gas Transmission pipeline, which is being developed by TransCanada Corp, will only go ahead if Petronas' LNG project is approved.

More than a dozen LNG terminals have been proposed for the Pacific coast province as energy companies from around the world race to export cheap Canadian gas to international markets.

But uncertainties around taxation, the regulatory process and aboriginal consent have called into question whether any of the projects will ultimately be realized.

Under the benefit deal, British Columbia will pay the Nisga'a C$1 million at signing, C$2.5 million when construction begins and another C$2.5 million when gas starts to flow.

The Nisga'a will also receive a yet-to-be determined share of the C$10 million a year in ongoing benefits that will be available to all aboriginal communities along the pipeline's 900-kilometer (560 mile) route.

The province has previously reached similar deals with 15 of the 16 aboriginal communities on the route of a separate natural gas pipeline that would serve an LNG project being developed by Royal Dutch Shell.   Continued...