Lax Kw’alaams, Metlakatla sign multimillion-dollar LNG agreements

No final investment on Pacific NorthWest LNG yet, but Petronas official says agreement is important step
Lax Kw'alaams Mayor John Helin: 'The benefits that would accrue from the project... are huge for our community members.'

Premier Christy Clark chalked up something of a pre-election coup Wednesday February 15, when two key First Nations, the Lax Kw’alaams and Metlakatla, officially signed benefits agreements in support of Petronas’ $36 billion Pacific NorthWest LNG project in Prince Rupert.

Although Petronas has yet to announce a final investment decision, Wan Badrul Hisham, Petronas’ chief project officer for PNW LNG, suggested that the signing of a benefits agreement with First Nations was an important step.

“We at the Pacific NorthWest LNG are very encouraged by the achievement of this significant milestone in the development of the LNG project,” Hisham said at an official signing ceremony Wednesday in Victoria.

“With this agreement in place, we can now look forward towards working on a common goal of realizing the project.”

The Lax Kw’alaams originally opposed the project. In 2015, the band rejected a $1.2 billion offer of cash and land. But a change in band council leadership, which installed John Helin as the band’s mayor, eventually led to the band supporting the project.

It’s not yet clear how the new benefits agreement compares to the previous one. One the surface, it appears to offer less money and land than what was originally offered.

The new deal offers the Lax Kw’alaams $98 million and 1,942 hectares of Crown land – slightly less than 2,200 hectares originally offered.

It also offers annual payments and profit sharing from the LNG plant and the Prince Rupert Gas Transmission pipeline: $590,000 annually from the LNG plant and $815,000 annually from the pipeline.

There are numerous other agreements, including spending commitments worth $50 million for roads and other infrastructure.

Helin said the agreement gives his people some input on how the project proceeds, and will provide his people with ongoing revenue streams and jobs.

“For the first time in my lifetime…we’re really a part of what’s happening within our traditional territory as far as looking after the environment and getting benefits I think we deserve,” Helin said.

“The benefits that would accrue from the project, should it go forward – or when it goes forward – are huge for our community members,” Helin said. “It goes a long way to addressing a lot of our needs in our communities.”

Metlakatla Chief Councillor Harold Leighton called the agreement “leading edge.”

“It gives the Coast Tsimshian a say in how the facilities are going to be built and to make sure they’re built safely,” he said.

“The revenue sharing is going to change the communities. And hopefully, one day, both communities will be self sufficient. The size and scope of the agreements that we signed are unheard of.”

The LNG plant on Lelu Island would cost $11 billion to build. But when the construction of the Prince Rupert Gas Transmission line and all the upstream natural gas assets are included, PNW LNG represents a total capital investment of $36 billion.

“When Pacific NorthWest LNG goes ahead, it means an investment of $36 billion,” said Premier Christy Clark. “One of the largest private sector investments – thank you Petronas – that will ever have been made in the country.”

She said the project will create 3,500 construction jobs and 350 permanent jobs.

Clark has been criticized for promises made in 2013 that an LNG industry would be underway by now. The only LNG project to get a final investment decision yet is the much smaller Woodfibre LNG project in Squamish.

nbennett@biv.com

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