Derek Baker

Contractor curiosity for Pacific NorthWest LNG

In PNW LNG’s presentation to chamber of commerce members, interest was piqued on how regional businesses could be included

In Pacific NorthWest LNG’s presentation to chamber of commerce members, interest was piqued on how regional businesses could be included in the project, should it go through.

There was an unusual amount of questions at the Prince Rupert and District Chamber lunch on Nov. 16 for Derek Baker, the community relations advisor for Pacific NorthWest LNG.

There were no groundbreaking updates in Baker’s speech but the audience was hungry for answers on the company’s liquefied natural gas (LNG) project on Lelu Island — a project that would contribute $1.2 billion annually in taxes and royalties and $2.9 billion to Canada’s GDP once in operations.

Baker’s presentation was well rehearsed. He had given the same speech, same graphs of the LNG market conditions, just to a different crowd. This was the first time since January that the proponent spoke to the chamber, and it came after the federal government approved the project late September.

“Our team has been very busy in Prince Rupert in trying to get the word out and provide some update on most notably the CEAA approval,” Baker said.

He gave an overview of what the project has achieved since 2012 to get the government’s approval, including a 40 year export licence, a shovel-ready pipeline project to bring gas from northeast B.C. to the Lelu Island facility, a tax and infrastructure agreement with Port Edward and the Canadian Environmental Assessment Agency approval.

Over those four years, the global price for LNG dropped — in the U.S. it dropped as much as 54 per cent — and now the project’s shareholders are in the process of evaluating the project’s financial viability.

“That’s the next significant milestone the project will need to achieve,” Baker said.

The 190 legally binding conditions laid out by the federal government were also addressed: how the project will use aeroderivative gas turbines to reduce greenhouse gas emissions, that the project will comply to an emissions cap, the first phase is capped at 3.2 million tonnes of carbon dioxide and they must provide monthly air-quality reports, to name a few.

A social management plan, as required by the B.C. Environmental Assessment Office, is in the works.

“In this plan we have a responsibility and a legal obligation, and a corporate obligation, to be thinking about the social impacts of a project of this scale and developing potential mitigations to what those impacts might be,” Baker said.

They’ve been meeting with municipalities, area First Nations and social service providers to discuss what social impacts these groups foresee and mitigation measures may have to be taken.

Despite the company’s pending decision on whether or not to move forward with the project, Baker listed contributions the company has made in the community to date since investigating its LNG project.

The company has invested nearly $1-million in education and training for residents in the area; 170 individual sponsorships and 70 per cent of them are currently employed or looking for more training. He also highlighted the company’s $125,000 investment in the Tall Trees Trail project.

There is an ongoing application for a community investment fund for others in the area who would like PNW LNG to contribute to their project.

With the floor open for questions, the first asked how local businesses can participate and what the process would be?

PNW LNG hasn’t announced who their engineering procurement and construction (EPC) contractor is going to be. Once they confirm the contractor, Baker said they “will announce forums and meetings with local businesses to make sure they’re aware of what’s expected of them so they have a higher likelihood of getting involved in the project.”

Another question was asked about if the company was still actively engaging the EPC contract or doing any early work, such as constructing roadways, despite the current market conditions.

Baker confirmed they are still engaged with potential EPC contractors for the project but early works are still being considered and reviewed by the shareholders.

Alan Yu, the founder of Fort St. John for LNG, travelled from Terrace to see the presentation.

Yu asked how long, “from the time the first shovel hits the ground, to the first LNG ship going out of Prince Rupert, or Lelu Island, do you have a timetable for how long this will take?”

The estimate is five years, but the exact length of time won’t be announced until they give an EPC contract, Baker said.