Malaysia’s state-owned energy giant Petronas is making major environmental changes to its proposed liquefied natural gas facility near Prince Rupert in a bid to obtain regulatory approval as a potential player in B.C.’s budding LNG industry.

The company’s modifications include three aimed at satisfying environmentalists and First Nations, according to a letter written by the Petronas-led Pacific NorthWest LNG joint venture for the site, situated on Lelu Island in northwestern B.C.

Petronas is scrapping plans for large-scale dredging to avoid disturbing fish, marine mammals and migratory birds; cancelling a proposal to build a sprawling housing camp on Lelu Island; and altering designs on a bridge or jetty that would extend away from the island.

The province is counting on the fledgling LNG sector to boost the economy, with hopes of eventually wiping out B.C.’s debt.

While there are 17 proposals to build LNG export plants, industry experts say there is only room for four at most in the province due to fierce global competition. No B.C. LNG projects are operating yet, leaving the province lagging behind rivals such as Australia, Nigeria and the United States.

Pacific NorthWest LNG, one of the largest B.C. proposals, is widely viewed as a bellwether for the fortunes of the province’s nascent LNG industry. But the project’s leaders have warned that government and regulators must quickly render decisions.

“The alterations to the marine terminal will remove the need for extensive dredging at the marine terminal as proposed in our application and the associated disposal at sea of the dredged material,” Michael Lambert, head of environmental and regulatory affairs at Pacific NorthWest LNG, said in his letter last month to the B.C. Environmental Assessment Office.

Environmentalists say the changes don’t go far enough, but winning regulatory approval would be a major step forward for Pacific NorthWest LNG.

Two weeks after Mr. Lambert sent the letter, Pacific NorthWest LNG president Greg Kist sounded the alarm about delays in the regulatory process. He said red tape is putting the project at risk of missing the year-end deadline by Petronas to make a final investment decision on whether to proceed with the venture. Days later, Petronas chief executive officer Shamsul Azhar Abbas threatened to cancel the project if the B.C. government’s tax regime to be unveiled by late October isn’t competitive and if the regulatory process takes too long.

The Canadian Environmental Assessment Agency is the lead regulator on the case, co-ordinating the review with its B.C. counterpart.

Pacific NorthWest LNG staff will detail the revisions at community gatherings this week, with the first information session on Tuesday in Port Edward, followed by a meeting on Wednesday in Prince Rupert.

Pacific NorthWest LNG is seeking to house more than 3,000 construction workers in prefabricated modular units to be assembled in Port Edward instead of Lelu Island. If there is any island accommodation, it would be a small temporary camp without any utility connections. “Accommodation off the island would be provided by a third-party camp provider on private land within the District of Port Edward,” Mr. Lambert wrote in his letter to Kenneth Howes, the project assessment manager at the provincial environmental office.

The Petronas-led group estimates that $36-billion will need to be spent in order to make its planned exports a reality by early 2019.

VANCOUVER — The Globe and Mail
Published Monday, Oct. 06 2014, 3:00 AM EDT
Last updated Monday, Oct. 06 2014, 3:00 AM EDT