It is no secret that the road to FID for an LNG project or any Energy project in Canada is a lengthy one.
However, several positive developments bode well for the Cedar LNG project backed by the Haisla Nation.
Cedar LNG received approval for Cedar LNG 1-located on Haisla Nation-owned land in Douglas Channel, one of the principal shipping routes on the BC coast- back in 2015 from the NEB (now the CER) while the Haisla were working with Pacific Traverse Energy and Delfin Midstream. The Haisla then began to engage in negotiations with major gas producers and pipeline transmission companies and by 2019, they announced intentions to receive gas supplies from the Coastal GasLink Pipeline.
This was followed by another fortuitous event in January 2020, when the Impact Assessment Agency of Canada, allowed BC’s Environmental Assessment Office to conduct the impact assessment of the project on behalf of the IAAC.
A game-changing partnership
The latest positive development for the project came this month as Pembina Pipeline Corp announced it would buy Pacific Traverse Energy and Delfin Midstream’s 50% stake in the Cedar LNG Project to develop it in partnership with the Haisla Nation.
With Pembina’s $90 million expected investment into Cedar LNG over the next two years, things are looking very encouraging prior to the final investment decision (FID) expected in 2023. The Haisla will continue to own the remaining 50% stake and the estimated gross project cost of Cedar LNG is $2.4 billion. The expected in-service date for the project is the second half of 2027.
According to Pembina’s website:
“The proposed Cedar LNG Project, the largest First Nation-owned infrastructure project in Canada has one of the cleanest environmental profiles in the world…Cedar LNG has completed initial work that has allowed regulatory and engineering workstreams to be well advanced for a project at this stage. The Project has secured its LNG export license from the Canada Energy Regulator.”
In addition to the partnership with Pembina, in general, the outlook for LNG projects is good due to the global shortages of natural gas causing a rally in natural gas prices as reported in Bloomberg.
Organic development of partnership
Recently, I was able to virtually sit down with Crystal Smith- Haisla Nation Chief Councilor to discuss the project and the Haisla Nation’s interest in resource development as a means for economic prosperity and environmental stewardship. She points out that the development of the partnership with Pembina was quite organic:
“The partnership evolved over the last few years. We put out an RFP and by 2018/ 2019 we were looking for a partner to help the Nation make this project become a reality. The partnership has taken on many different faces as we have been transitioning through this project. Just recently our council solidified the relationship in a formal partnership.”
Indigenous interest in energy on the rise
Indigenous interest in the economic opportunities that the energy industry provides is on the rise according to Stephen Buffalo CEO and president of the Indian Resource Council which represents roughly 130 First Nation communities. He has pointed out that in Western Canada, oil and gas development is close to First Nations lands and their interest is a natural outcome of this proximity.
“As we continue forward, 643 First Nations will not see very much increase in their federal funding under the Indian Act. So, we have to find a different way and economic development is probably our only way and for some of our communities, it’s being involved in the sector. It gives our people an opportunity to start working and providing for their families.”
The Haisla Nation’s decision to advance Indigenous participation and ownership in Canadian energy development was many years in the making. Crystal Smith points out there was discussion and direction with input from many Haisla leaders. It was framed as a vision of the Nation’s participation in resource development as a means of economic prosperity and environmental stewardship. She sees the Haisla growing the economic sector of their territory and sees First Nations across Canada aspiring to develop ownership equity. She points out that for projects proposed in BC and Alberta, there is discussion of equity participation of First Nations within their economies and their territories. According to Smith, a partnership with Pembina reflected the Haisla’s interests and core values,
“It was important for us to find a partner with the same values of environmental protection and community-centered development. Pembina’s long history of safe, reliable operations, and engagement with local communities made them the distinct choice for Cedar LNG.”
LNG a preferred product for export
The proximity of the Haisla territory to the BC coast and the short shipping route to Asia have long factored into the Nation’s interest in LNG. The recent shift of focus from Japan as the world’s biggest LNG importer to China’s emergence as the world’s largest buyer of LNG (China is expected to overtake Japan in 2021) has renewed optimism for LNG globally. Crystal Smith says that the Haisla have a geographical location that is suited for the export of most commodities. However, when it comes to the products that are preferred by the Nation -liquefied natural gas is welcomed and supported by the majority of their membership to enable economic development. She points out that they have been a part of the industry since the 1980s and leaders are very familiar with the impacts on their territory. The Cedar LNG project is going to be the first indigenous majority-owned LNG export facility, and she describes the benefits:
“There are going to be impacts to the region and to the economy of Canada. Since Cedar LNG is First Nations majority-owned, there is a reconciliation that happens between our neighboring nations and us. There are many key aspects that are important to our leadership and of course, the environment is in the forefront.”
A focus on generational benefits
Smith says the Haisla seek to develop long-term relationships through economic development with projects like Cedar LNG. Being the traditional landlords of their territory for many generations, she says when the Nation decides anything pertaining to governance and leadership, they always consider decisions with the best interest of seven generations of Haisla in mind. It is part of Haisla culture and their laws which are called “Nuyen”. With the environment being a priority, the Nation talks about the opportunity for Cedar LNG to be the cleanest LNG -not only in Canada but also in the world. Taking into consideration the impacts to Haisla territory, the choice was for technology that would be air-cooled versus water-cooled. Electric drive was selected versus any other type of energy to power the plant. The floating design was chosen because it offers significantly less environmental impact on the Douglas Channel coastline. Smith and the Haisla see Cedar LNG as a truly generational opportunity for prosperity.
“I think the biggest takeaway is we are so proud to be able to have this opportunity and from a First Nations perspective of equity, it is going to be nation-transforming. It is not only going to impact our membership today – it is going to ensure that our membership for many generations is going to be provided the same opportunities for prosperity as we have today.”
Maureen McCall is an energy professional who writes on issues affecting the energy industry