British Columbia's burgeoning liquefied natural gas sector has a major new player.
Nexen ULC – a subsidiary of China's state-owned energy company CNOOC and Japanese oil and gas firms INPEX Corp. and JCG Corp. – has signed a sole proponent agreement with the B.C. government.
A sole proponent agreement gives Nexen ULC the exclusive right to plan, design and potentially build and LNG export facility, dubbed Aurora LNG, on Grassy Point, near Prince Rupert, B.C.
Premier Christy Clark made the announcement in advance of her opening speech at the British Columbia Business Council's economic summit on November 12.
"As the global economy continues to struggle, LNG represents a singular opportunity to transform our economy," said Clark.
"While we have a lot more work ahead of us, this agreement is another step towards realizing that opportunity."
Last February, the B.C. government issued a call for expressions of interest to companies for an LNG facility on Crown land on Grassy Point. Nexen ULC was one of four submissions.
According to a government press release, the other three submissions are still being considered for an adjacent plot of land on Grassy Point.
Upon signing the agreement, Nexen ULC will pay $12 million to the province. Another $12 million will be paid by the first anniversary of the agreement, if the proponents wish to continue the project.
The announcement does not constitute a final investment decision on behalf of Nexen ULC. The company will have to apply to the National Energy Board for an export licence and submit a project design and description to initiate the environmental review process before any development takes place.
If Nexen ULC does make a final investment decision on the project, the $24 million paid the B.C. government will be subtracted from the sale price of the land.
"Through project assessment and stakeholder consultation we are committed to examining the potential to build a best-in-class LNG facility – one that creates jobs, delivers lasting economic and social benefits and is developed with the environment top-of-mind," said Nexen president Kevin Reinhart, in a statement.
For a full list of LNG projects in B.C., click here.
