CALGARY – The Canada Energy Regulator says it has approved an application from Chevron Canada for a 40-year licence to export natural gas from the proposed Kitimat LNG project despite environmental opposition.
The application filed last spring to the National Energy Board, the CER’s predecessor, aimed to double the previously approved export licence duration and nearly double the potential output of the facility to 997 billion cubic feet of natural gas per year.
That’s the equivalent of about 18 million tonnes of liquefied natural gas, a substantial increase over the previous 10-million-tonne, 20-year licence which is set to expire at the end of this year.
In its decision letter, the CER notes that it rejected an application from B.C. environmentalist Michael Sawyer to restart the regulatory process and hold a public hearing.
It also rejected his argument an adequate natural gas supply hadn’t been proven, despite a Chevron expert’s estimate of Canadian and North American natural gas resources of 1,000 trillion cubic feet and 4,000 Tcf, respectively.
Chevron has previously stated the increase in scope is designed to improve the project’s “cost of supply competitiveness” compared with other LNG projects around the world. It has not said when a final investment decision will be made, although its application envisions commissioning of the facility by 2029.
In the fall of 2018, the Shell Canada-led LNG Canada consortium announced it would proceed with its $40-billion, 14-million-tonne-per-year project, also to be built near Kitimat. It’s expected to be in service by 2024.