Imperial Oil/ExxonMobil LNG project gets 15-year extension on export licence

WCC LNG the second proposed export facility to receive extension on original 25-year licence

British Columbia's attempts to bust onto the global liquefied natural gas (LNG) market got a shot in the arm July 28.

WCC a liquefied natural gas (LNG) export facility that's being jointly pursued by Imperial Oil and ExxonMobil, this week received a 15-year extension to its LNG export licence from the National Energy Board (NEB).

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The project is planned for the Tuck Inlet, a deepwater port near Prince Rupert. It would have an initial capacity to ship up to 15 million tonnes of LNG a year to buyers in Asia. The gas would be sourced from Northeast B.C. and transported to the coast via either Spectra Energy Corp.'s $7.5 billion Westcoast Connector Gas Transmisison project or TransCanada Corp.'s $5-billion Prince Rupert Gas Transmission line.

The 15-year extension to the company's export licence is the result of new legislation introduced through Canada's Economic Action Plan passed by the former Conservative party government in June 2015. The change allowed for natural gas export licences to be extended to a term of 40 years, up from the previous 25. 

WCC LNG originally received a 25-year export licence in December 2013. 

It's the second project to receive an extension under the new legislation. The Shell-led LNG Canada project was the first, gaining approval for its 15-year extension to its 25-year licence in January. 

Petronas' proposed Pacific NorthWest LNG export terminal has applied, but has not yet received approval to extend its 25-year permit to 40 years.

WCC LNG's export licence extension will help the company compete for Asian customers.

Key to the NEB's decision to extend the licence was to determine whether the quantity of natural gas WCC seeks to export was surplus to the Canadian demand. To do this, a long-term natural gas supply and demand forecast that looks forward as far as 2065 was conducted by Solomon Associates. It determined that the amount of gas WCC seeks to export does not exceed the expected Canadian demand.

"Western Canadian gas resources are robust and continue to grow with the development of horizontal drilling and multi-stage (fracking) technologies," the NEB report said, adding that there is an abundance of low-cost natural gas resources available in the North American and Canadian shale-gas and unconventional-gas plays.

According to Natural Gas Intelligence, the decision brings the total volume of Canadian gas approved for export by the NEB to a whopping 528 trillion cubic feet.

However, the NEB says it does not expect all LNG export licences issued by the Board will be used or used to the full allowance.

Both Imperial Oil and ExxonMobil have drilling rights in Northeast B.C.

If no gas is exported within 10 years of July 28, the licence will expire.

A website setup for the project wcclngproject.ca, was offline as of July 29.

dcreporter@dcdn.ca

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