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Category Archives: Liquefied Natural Gas

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B.C.’s LNG Export Industry: 2016 Kick-Off

Posted in Liquefied Natural Gas
British Columbia

Anyone following the development of British Columbia’s nascent liquefied natural gas (LNG) export industry will have a lot to watch out for in 2016. According to both government and industry-watchers, two major LNG projects – Pacific NorthWest LNG and LNG Canada – may reach final investment decisions (FID) in 2016.

In June 2015, Petronas-owned Pacific NorthWest LNG announced a positive FID on its proposed export facility on Lelu Island near Prince Rupert, B.C. subject to two conditions. The first condition, approval by the B.C. Legislature of the Project Development Agreement with Pacific NorthWest LNG, was satisfied in July 2015. The … Continue Reading

Québec’s Strategic Environmental Assessment on Hydrocarbons: HEC Montréal Releases Study on Potential Markets for Quebec’s Hydrocarbons

Posted in Liquefied Natural Gas, Natural Gas, Québec
Québec

On October 27, 2015 HEC Montréal released a study on potential domestic and international markets for Quebec’s hydrocarbons. The release of this report constitutes one of the final milestones in the strategic environmental assessment undertaken by the Québec Government regarding its hydrocarbon action plan. The Québec Government is now expected to table a final report on its findings before the end of 2015 which could potentially lead to the adoption of a new broad-ranging bill on hydrocarbons.… Continue Reading

BC Premier’s 2015/16 Mandate Letters Highlight Policy Priorities on LNG, Climate Change, Oil Spill Safety and Tailings Pond Management

Posted in Climate Change, Liquefied Natural Gas
British Columbia

On June 12, 2015, British Columbia (BC) Premier Christy Clark issued updated mandate letters to her provincial cabinet ministers. The annual mandate letter provides the government’s annual direction to the various provincial ministries and confirms each ministry’s priorities for the year.… Continue Reading

Federal Government Introduces Prince Rupert Port Authority Liquefied Natural Gas Facilities Regulations

Posted in Federal, Liquefied Natural Gas
British Columbia

On June 20, 2015, the federal Department of Transportation published the proposed Port of Prince Rupert Liquefied Natural Gas Facilities Regulations (Regulations) with respect to proposed liquefied natural gas (LNG) facilities to be built at Prince Rupert, British Columbia. The Regulations are issued under federal authority by virtue of the Canada Marine Act, which regulates Canadian ports. At present, there are four proposals for LNG facilities to be located at Prince Rupert, two are to be located wholly on federal port lands and two are to be located largely on provincial lands, with small portions on federal port lands.… Continue Reading

B.C. Government Tables Amendments to LNG Tax Legislation

Posted in Liquefied Natural Gas
British Columbia

In a previous blog entry,[1] we provided comprehensive commentary on the then-recently tabled Liquefied Natural Gas Income Tax Act (the “Act”), the foundational piece of legislation in the B.C. Government’s proposed liquefied natural gas (“LNG”) taxation regime.

On November 27, 2014, the Act received royal assent and the Province has since been in the process of crafting associated regulations and amendments. The first of these, Bill 26 – Liquefied Natural Gas Income Tax Amendment Act, 2015 (the “Proposed Amendment”), was released on March 25, 2015, and proposes a number of amendments to the … Continue Reading

New Tax Incentive for the LNG Industry

Posted in Federal, Liquefied Natural Gas

The federal government announced on February 19, 2015 that accelerated capital cost allowance (CCA) treatment would apply to certain property used in liquefaction facilities for the domestic and export liquefied natural gas (LNG) markets and for LNG storage. The new measure signals the federal government’s support for Canada’s emerging LNG industry, and follows a concerted lobbying effort by LNG project proponents and industry associations.… Continue Reading

Province seeks to provide regulatory certainty to LNG investment in British Columbia

Posted in British Columbia Oil and Gas Commission, Liquefied Natural Gas
British Columbia

On February 16, 2015, the British Columbia Government tabled Bill 12, the Federal Port Development Act (the “Act”). The Act builds on last year’s amendments to the Canada Marine Act, S.C. 1998, c. 10, which, in part, enabled the federal government to adopt provincial rules and regulations to apply to specific projects on port lands. Once enacted, the Act will authorize the Province to enter into agreements with the federal government and a federal port to administer and enforce provincial law on port lands. Specifically, the Act authorizes a provincial official or body to exercise a power … Continue Reading

OGC to Prohibit Conversion of LNG Facility Pipelines

Posted in Aboriginal, British Columbia Oil and Gas Commission, Energy – Conventional, Liquefied Natural Gas
British Columbia

On January 5, 2015, the Province of British Columbia issued a direction (the “Direction”) to the British Columbia Oil and Gas Commission (“OGC”) prohibiting the OGC from issuing permits to convert LNG facility pipelines, which are built to support liquefied natural gas (“LNG”) facilities, into pipelines for transporting oil or diluted bitumen. The Direction prohibits the OGC from permitting project proponents to convert natural gas pipelines supplying LNG facilities to pipelines carrying oil.… Continue Reading

B.C. Government Tables Comprehensive LNG Tax Legislation

Posted in BC Ministry of Energy, Mines and Natural Gas, Liquefied Natural Gas
British Columbia

On October 21, 2014, British Columbia Finance Minister Michael de Jong announced Bill 6 – 2014, the Liquefied Natural Gas Income Tax Act (the “Act”), which proposes an income tax, effective for taxation years beginning on or after January 1, 2017, payable on net income from liquefaction activities at or in respect of a liquefied natural gas (“LNG”) facility in B.C.

Shortly following the announcement of the Act, McCarthy Tétrault’s LNG Team provided preliminary comments on its key highlights – see British Columbia Government Tables LNG Tax Legislation.[1] In this article, we provide a … Continue Reading

BC Sets New Global Greenhouse Gas Emissions Standard for LNG Industry

Posted in Climate Change, Emissions Regulation, Liquefied Natural Gas
British Columbia

On October 20, 2014, BC Environment Minister Mary Polak introduced legislation for the management of greenhouse gas (GHG) emissions from the province’s burgeoning liquefied natural gas (LNG) industry. With the objective of ensuring that BC has the cleanest LNG facilities in the world, Bill 2 (also known as the Greenhouse Gas Industrial Reporting and Control Act) seeks to establish a GHG emissions intensity benchmark of 0.16 carbon dioxide equivalent (CO2e) tonnes per tonne of LNG produced. A number of details of the new GHG regime for the LNG industry have yet to be determined in regulations, but the legislation … Continue Reading

Québec Government and Gaz Métro Partner for LNG

Posted in Liquefied Natural Gas, Plan Nord, Québec, Wind
Québec

On September 30, 2014, Québec Premier Philippe Couillard, jointly with the Minister of Energy and Natural Resources and the Minister Responsible for the Northern Plan, Mr. Pierre Arcand, the Minister for Transport and the Implementation of the Maritime Strategy, Mr. Jean d’Amour, and Mrs. Sophie Brochu, President and CEO of Gaz Métro, the principal distributor of natural gas in Québec, announced an investment by Investissment Québec of $50M in the share capital of the Gaz Métro subsidiary responsible for marketing liquefied natural gas (“LNG”), Gaz Métro LNG. According to the media, this investment represents a 42% stake in … Continue Reading

British Columbia to Unveil LNG Tax Rules in October 2014

Posted in Liquefied Natural Gas, Regulation
British Columbia

On September 21, 2014, British Columbia (BC) Deputy Premier Rich Coleman announced that BC will unveil its tax rules for the liquefied natural gas (LNG) industry next month.  It is anticipated that the BC Government will table the Bill for debate within the first two weeks of the fall session’s start on October 6, 2014 with the aim for the tax regime to be in place by November 30, 2014.

As noted in an earlier blog post, the Government of BC delayed the release of its tax regime back in February 2014 for the purpose of completing further consultations … Continue Reading

Proposed Amendments to the National Energy Board Export and Import Reporting Regulations

Posted in Energy – Renewable, Alternative and Clean, Liquefied Natural Gas, National Energy Board, Natural Gas

Overview

A number of recent Letter Decisions[1] of the National Energy Board (Board) note the need for the Canadian natural gas industry to access overseas markets due to an increase in the North American gas resource base. It is necessary that the legislation and regulations governing the export of natural gas reflect the realities of selling liquefied natural gas (LNG) to overseas markets.  While some amendments to the statutory framework have been made, important changes are necessary in order to create a commercially sensible regulatory regime.

Background and Regulatory Context

As a result of the July 2012 amendments to … Continue Reading

British Columbia Enacts LNG Facility Regulation

Posted in BC Ministry of Energy, Mines and Natural Gas, Liquefied Natural Gas
British Columbia

On July 21, 2014, the BC Oil and Gas Commission (OGC) enacted the Liquefied Natural Gas Facility Regulation[1] (LNG Regulation) under the authority of the Oil and Gas Activities Act (OGAA).[2]  On the heels of BC’s increasing emphasis on the liquefied natural gas (LNG) industry, the LNG Regulation expands and updates the sparse LNG-related provisions which were previously in the Pipeline and Liquefied Natural Gas Facility Regulation,[3] which consequently has now been amended by removing the LNG provisions and been renamed the Pipeline Regulation. In addition, the Consultation and Notification Regulation[4] under the OGAA was … Continue Reading

Woodfibre LNG Project to Use Electricity to Power LNG Compression

Posted in BC Hydro, Energy – Renewable, Alternative and Clean, Liquefied Natural Gas
British Columbia

On Tuesday, May 13, 2014, Woodfibre Natural Gas Limited (Woodfibre) announced its plans to use electricity from BC Hydro to power the compression of natural gas at its proposed liquefied natural gas (LNG) plant near Squamish, B.C.  According to Woodfibre, the decision not to use traditional natural gas-fired compression will decrease greenhouse gas emissions by 80%.

The Woodfibre LNG project is owned and operated by Woodfibre, a corporation established in British Columbia with offices in Vancouver (headquarter) and Calgary. Woodfibre is planning to develop its the Woodfibre LNG project on the former Western Forest Products pulp mill in the Squamish … Continue Reading

BC Minister of Environment Reverses Amendment to Reviewable Projects Regulation on Sweet Gas Processing Plants

Fort Nelson First Nation puts Government on Notice for Upstream LNG Development

Posted in Aboriginal, Liquefied Natural Gas
British Columbia

On April 14, 2014, the BC Government issued Order in Council (No. 185) amending the Reviewable Projects Regulation (B.C. Reg 370/200) to remove the need for a provincial environmental assessment for sweet natural gas processing plants (the Proposed Amendment).  The Proposed Amendment, which was to come into effect on April 28, 2014, would have had significant implications for upstream activities, especially in northeast BC where shale gas development is rapidly underway.… Continue Reading

National Energy Board Releases Decision on Export of Liquefied Natural Gas

Posted in Liquefied Natural Gas, National Energy Board

On April 16, 2014, the National Energy Board (NEB or the Board) issued a license to Triton LNG Inc. on behalf of Triton LNG Limited Partnership (Triton LNG LP), to export liquefied natural gas (LNG) (Letter Decision).[1] The licence will permit Triton to export up to 3,749,000 103m3 annually.

Before considering the merits of Triton’s application, the Letter Decision begins with the following noteworthy statement by the NEB regarding government policy and an acknowledgement of the importance of access to new markets:

Recent developments in gas production technology have resulted in a significant increase in the … Continue Reading

Federal Government Announces Approval of Four Long-term LNG Export Licences

Posted in Energy – Renewable, Alternative and Clean, Liquefied Natural Gas

On March 26, 2014, the Government of Canada approved four long-term liquefied natural gas (LNG) export licences for Pacific NorthWest LNG, Prince Rupert LNG, WCC LNG and Woodfibre LNG.  The four export licences authorize the export of a total of up to 73.38 million tonnes per annum (mtpa) of LNG.

This approval by the Government of Canada is the last step in the approval process for the issuance of a LNG export licence.  While obtaining a long-term National Energy Board (NEB) export licence is one key step in the approval process for these LNG projects, additional permits and approvals are … Continue Reading

BC Government Further Delays Introduction of LNG Tax Regime

Posted in Aboriginal, Energy – Renewable, Alternative and Clean, Liquefied Natural Gas
British Columbia

On February 5, 2014, the BC government announced that it is unlikely to release the detailed tax regime for the province’s proposed liquefied natural gas (LNG) sector before the fall legislative session.  In his address to the media, BC Finance Minister Mike de Jong explained that he expects the government to make the framework for the LNG tax public when he presents the provincial budget on February 18, 2014, but tax rates are unlikely to be released until legislation is tabled this fall.

In September 2013, the BC government cancelled the fall sitting of the legislature on the basis that … Continue Reading

Update on LNG-Related Activity in British Columbia: Regulatory and Contracting Advances

Posted in Energy – Renewable, Alternative and Clean, Liquefied Natural Gas, Regulation
British Columbia

British Columbia’s new liquefied natural gas (LNG) sector was particularly lively in the weeks since our mid-December update.  To keep our readers up-to-date, we have prepared the following brief summary of recent notable LNG sector activity.… Continue Reading

The BC LNG Sector Remained Active Through 2013: End-of-Year Update

Posted in BC Ministry of Energy, Mines and Natural Gas, Liquefied Natural Gas
British Columbia

British Columbia’s emerging liquefied natural gas (LNG) sector remained active throughout the second half of 2013.  Governments and proponents negotiated agreements and projects advanced through various regulatory processes.  Given continued interest in BC’s new industry, we prepared the following end-of-year update that summarizes notable LNG sector activity.… Continue Reading

Peeling Back the Layers of LNG Development: A Primer on the Regulatory Framework for LNG Projects in BC

Posted in Energy – Renewable, Alternative and Clean, Liquefied Natural Gas

In an increasingly competitive global market for natural gas, the race to export liquefied natural gas (LNG) to Asia is on.  With LNG attracting a premium price in Asia, Canada is vying with the US, Australia, Russia, East Africa and the Middle East to rapidly build the infrastructure required to move LNG to key markets in Japan, Korea, Taiwan, China and India.  With the commercial success of shale gas plays in the US, the nascent LNG industry in British Columbia is attracting significant interest from investors as an economically feasible venture. BC is particularly well suited to unconventional gas production, … Continue Reading

B.C.’s Environmental Assessment Office and Oil and Gas Commission Enter into MOU to Streamline Approval Process for LNG Projects

Posted in Energy – Conventional, Energy – Renewable, Alternative and Clean, Liquefied Natural Gas
British Columbia

BC’s Environmental Assessment Office (EAO) and Oil and Gas Commission (OGC) have entered into a memorandum of understanding (MOU) intended to streamline environmental assessments and permitting for liquefied natural gas (LNG) and other reviewable projects by reducing duplication and improving timelines.… Continue Reading