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Canada’s NEB Licenses Shell-Backed LNG Exports

Canada’s first super-long, 40-year export license for liquefied natural gas (LNG) tanker shipments overseas from the northern Pacific Coast of British Columbia was granted Thursday to the LNG Canada international consortium.

The National Energy Board (NEB) authorized the joint venture of Shell, PetroChina, Korea Gas and Mitsubishi to ship a total of 52.7 Tcf of gas, at a rate of up to 3.7 Bcf/d, from a proposed Kitimat terminal. The group is developing supplies with horizontal drilling and hydraulic fracturing in the shale-like, liquids-rich Montney geological formation that straddles the BC-Alberta border (See Shale Daily, Jan. 4).

The NEB ruling came two days after the BC Oil and Gas Commission (BCOGC) gave LNG Canada the first formal terminal construction permit (see Daily GPI, Jan. 6).

Federal legislation last year repealed a 25-year limit on export licenses. Also in 2015, the BC government assigned the BCOGC exclusive power to grant terminal site permits. Both measures responded to industry requests for regulatory efficiency and adaptation to overseas markets.

No dates have been set to start construction of the LNG Canada terminal, or for shipments to begin. A sunset clause in the NEB ruling said the export license would remain valid if deliveries begin before Dec. 31, 2022. The board added that a deadline extension would be possible if the project is delayed.

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