Cedar LNG earns BC environmental approval [UPDATE]
Cedar LNG, a 3mn metric tons/year floating LNG facility advanced by Haisla Nation and Pembina Pipeline, has earned its environmental assessment certificate (EAC) from the BC Environmental Assessment Office (EAO), the partners said March 14.
At the same time, Cedar has entered into a memorandum of understanding (MOU) with Montney producer ARC Resources for a long-term liquefaction services agreement covering about half the facility’s expected output.
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“The receipt of our EAC is the culmination of more than a decade of work by the Haisla Nation and marks a significant milestone for the Cedar LNG project and the Haisla Nation’s journey towards economic self-determination,” Haisla Nation Chief Councillor Crystal Smith said. “With Cedar LNG, we are setting a new standard of responsible and sustainable energy development.”
The C$3bn project is expected to employ about 500 workers during peak construction, and about 100 workers during operations.
BC Premier David Eby praised Cedar LNG as the first Indigenous-majority owned LNG export facility in Canada, and as a model for others to follow.
“This is a significant milestone that honours our government’s commitment to respect self-determination and the Declaration on the Rights of Indigenous Peoples,” he said. “Already proposed to be one of the of lowest-emitting facilities in the world, we will be working in partnership to further reduce the project’s emissions.”
Cedar LNG incorporated several design decisions to minimise its environmental footprint, one of the most important of which was to power the facility’s liquefaction process with renewable electricity from the provincial power grid.
It will also take advantage of capacity on the Coastal GasLink (CGL) pipeline, which will deliver feed gas to the nearby LNG Canada project, led by Shell and four other international partners. Cedar LNG has a long-term transportation agreement with CGL for 400mn ft3/day of capacity and has received its first permit from the BC Energy Regulator for the 8.5 km pipeline that will connect its project, on Haisla traditional territory on the Douglas Channel near Kitimat, to the CGL pipeline.
The EAO submitted its 807-page environmental assessment report to the provincial and federal governments in mid-November, initially subject to a 45-day window for approvals to be received. That window was extended by 69 days, the BC government said, to allow George Heyman, the province’s minister of environment and climate change strategy, and Josie Osborne, its minister of energy and low carbon innovation to more carefully consider the project.
“This decision was carefully made after considering all environmental impacts and comes with 16 legally enforceable conditions that Cedar must follow over the lifespan of the project, in addition to other oil and gas emission control regulations which government is developing,” Heyman said, noting that the province is working with Haisla Nation to help the project achieve climate objectives.
“This project will take all possible measures currently available to reduce greenhouse gas emissions and the MOU between Haisla Nation and the province will explore ways to have the project work toward reaching near-zero emissions by 2030,” he said. “With these measures in place, I have concluded that the project can fit within BC’s climate targets and goals.”
The EAO assessed the project under both provincial and federal regulations, with the one assessment supporting both provincial and federal decisions.
The EAO recommended 65 federal mitigation measures and nine follow-up programmes to address potential impacts from the project in areas of federal jurisdiction, including marine shipping, marine emergency response and greenhouse gas emissions.
Federal environment minister Steven Guilbeault released a decision statement March 15 concurring with the BC approval and attaching more than 250 conditions, including a requirement to further reduce greenhouse gas emissions.
The MOU with ARC Resources – a major Montney producer with 100% of its production certified under Equitable Origin’s EO100 standard – will see Cedar and ARC work towards a definitive agreement for the liquefaction of 1.5mn mt/yr of LNG, the equivalent of about 200mn ft3/day of natural gas.
“We are pleased to partner with Cedar LNG on this important infrastructure project for Canada,” ARC CEO Terry Anderson said. “Through responsible development, innovation, and collaboration, we can advance the export of more Canadian energy to global markets.”
The MOU with Cedar LNG marks ARC’s third major penetration into global LNG markets: in 2021, it signed a long-term agreement to supply 150mn ft3/day to an LNG Canada participant, and last year it entered into an agreement to supply 140,000 mn Btu/day to Cheniere Energy, beginning in 2027.
Cedar LNG CEO Doug Arnell said ARC’s asset quality, its leading ESG performance and financial strength, are important attributes in an LNG partner and will help the project drive forward to an anticipated final investment decision (FID) in Q3 2023.
“In the coming months, we will be focused on advancing work across four critical streams – engineering, regulatory, commercial discussions, and financing so that we are well positioned to deliver a project the Haisla Nation, Pembina, British Columbia, and the rest of Canada will be proud to showcase,” he said.
Cedar LNG also continues to progress commercial discussions with other potential customers for long-term volume commitments.