Pacific NorthWest LNG & Progress Energy Canada Ltd. welcome National Energy Board decision on North Montney Mainline Project


Photo courtesy of Progress Energy Canada Ltd.

Michael Culbert, president & CEO of Progress Energy Canada Ltd. and Pacific NorthWest LNG, today welcomed the announcement by the National Energy Board (NEB) recommending approval of the North Montney Mainline Project to the federal government and approving rolled in tolls for the initial phase of the project; satisfying a key deliverable required for a Final Investment Decision (FID).  “This decision is a key component to fulfilling a core requisite that informs our Final Investment Decision,” says Michael Culbert. “With this decision in hand – and awaiting other regulatory approvals, PETRONAS and our partners will continue to work cautiously toward a FID on the Pacific NorthWest LNG (PNW LNG) project.”

The North Montney Mainline will substantially increase capacity on the Nova Gas Transmission System, providing transportation infrastructure from Progress Energy’s upstream natural gas reserves to the proposed Prince Rupert Gas Transmission Line which will supply Pacific NorthWest LNG’s liquefaction export terminal near Prince Rupert, British Columbia.

“While great strides are being made to bring fiscal and regulatory certainty to our project, in order to achieve a positive FID, Canadian liquefied natural gas (LNG) will need to be competitive with other supply sources available to the Asian markets,” says Culbert.

The February 2015 announcement regarding LNG capital cost allowance by Prime Minister Harper provides important economic and competitive support that is required by the nascent Canadian LNG industry. Additionally, it provides the clarity required to continue to move an investment decision forward in a timely manner.

Over the past several months, Pacific NorthWest LNG has also made progress in British Columbia – in large part thanks to the leadership of Premier Christy Clark and Natural Gas Development Minister Rich Coleman. In particular, PNW LNG finalized its Project Development Agreement (PDA) with the Government of British Columbia, received its BC Environmental Assessment Certificate and worked with the Community, Sports and Cultural Development Minister Coralee Oakes to implement a landmark property tax agreement with the District of Port Edward under the purview of Mayor Dave MacDonald.

The work currently being undertaken by Progress Energy in northeast British Columbia has had a singular focus: to prove access to world class natural gas resources and ultimately provide a reliable long term supply of natural gas to Pacific NorthWest LNG’s export markets. After two years of successfully appraising Progress Energy’s natural gas reserves in the North Montney, the company is now moving into the development phase with a concentrated effort to increase production in anticipation of sending natural gas feedstock to B.C.’s west coast.

“2015 marks the culmination of a successful appraisal phase for the upstream components of the project,” says Culbert. “We transformed our land position from a sizeable opportunity to a true world class unconventional resource. During this period we defined the resource potential of the North Montney, delivered aggressive reserve and production growth, advanced our technical skills and competence, and ramped up operations in a safe and compliant manner.”

Once liquefied, this natural gas destined for markets throughout Asia would diversify Canada’s energy exports and lay a solid foundation for continued long-term careers and economic development throughout northern British Columbiaand other parts of Canada.

In 2014 alone, Progress Energy Canada Ltd. accomplished the following:

  • Invested more than $2 billion in drilling and infrastructure projects in northeast British Columbia,
  • Provided direct and indirect employment for approximately 6,000 workers,
  • Increased its full-time workforce by approximately 40 per cent,
  • Increased proved plus probable reserves for the North Montney Joint Venture to 19 trillion cubic feet equivalent (tcfe) or 3,174 million barrels equivalent (mmboe), which will support 2 billion cubic feet per day of LNG natural gas feedstock for 25 years,
  • Completed more than 180 infrastructure projects, including 10 compressor stations, a gas processing plant and 900 kilometres of pipeline,
  • Drilled and completed approximately 200 Montney natural gas wells, and
  • Continued to build on its North Montney position with a $1.5 billion acquisition of assets in northeast British Columbia.

In parallel with the upstream work undertaken over the past year, Pacific NorthWest LNG has taken significant steps toward bringing the emerging LNG industry in British Columbia closer to reality. Building upon agreements with offtake partners signed in 2013, the LNG project announced further partner and LNG off take agreements with Sinopec and Indian Oil Corporation in 2014 to solidify a long-term market for LNG.

The Prince Rupert Gas Transmission (PRGT) project, led by TransCanada Pipelines Ltd. has worked diligently with stakeholders and First Nations leaders over the past two years to route a natural gas transmission system that would cross northern British Columbia to deliver natural gas to PNW LNG’s proposed facility on Lelu Island. PRGT was granted an Environmental Assessment Certificate in late 2014, and continues its work with stakeholders and regulatory agencies to secure the remaining permits required to commence construction.

From the outset, the project has emphasized a positive and constructive relationship with area First Nations. In 2014, Pacific Northwest LNG reached agreement with the Metlakatla and Kitselas First Nations to provide for multi-generational opportunities and collaboration on environmental interests.

A Final Investment Decision by PETRONAS and partners is contingent upon core components of the value chain gaining additional clarity. These components include competitive Engineering, Procurement, Construction and Commissioning (EPCC), pipeline and vendor costs, clarity in the federal regulatory process, approval of the PDA by the BC government and projected international market conditions.

Pacific NorthWest LNG and Progress Energy Canada have the potential to create thousands of long-term careers inCanada, provide billions of dollars in government revenue to support public services and generate unparalleled economic activity over the life of the potential project.

“We expect 2015 to be a watershed year for the province and the country,” says Culbert. “It is our hope that Pacific NorthWest LNG will be the leader in helping our nation realize the LNG opportunity that will benefit generations to come.”

About Pacific NorthWest LNG

Pacific NorthWest LNG is planning to build a world-scale LNG export facility on Lelu Island in the District of Port Edward, British Columbia. The proposed facility will comprise an initial development of two LNG trains of approximately 6 million tonnes per annum (MTPA) each, and a subsequent development of a third train of approximately 6 MTPA. The proposed facility would liquefy and export natural gas produced by Progress Energy Canada in northeastern British Columbia. Pacific NorthWest LNG is committed to generating new economic and social benefits for the local community and First Nations, British Columbia and Canada in an environmentally safe and sustainable manner. Pacific NorthWest LNG is majority-owned by PETRONAS. JAPEX, Sinopec/Huadian, Indian Oil and PetroleumBRUNEI are also partners in Pacific NorthWest LNG and its associated natural gas supply. For more information about Pacific NorthWest LNG, please visit

About Progress Energy Canada

Progress Energy Canada, a leader in Canadian natural gas development, is building upon its history of performance excellence in North America to pioneer new infrastructure for delivering LNG to Pacific Rim markets. Producing natural gas in northeast British Columbia and northwest Alberta, Progress Energy is serving Canadian markets and ambitiously expanding productive capacity on its extensive Montney land holdings in preparation for the opening of new LNG markets in Asia. Progress Energy is wholly owned by PETRONAS of Malaysia, a global leader in LNG and the majority owner of Vancouver-based Pacific NorthWest LNG Ltd. Progress and Pacific NorthWest LNG are helping craft a bright new future for Canada’s energy exports.

SOURCE Progress Energy Canada Ltd.


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