Skip to content
Join our Newsletter

Pipeline tied to Petronas LNG project gets extension

Sunset start clause for North Montney pipeline extended from June 2016 to June 2017
Two pipelines that would feed natural gas to the Pacific NorthWest LNG plant in Prince Rupert represents $7 billion in capital spending. | TransMountain

A critical piece of infrastructure for the $36 billion Pacific NorthWest LNG plant that was supposed to be under construction by now has been granted an extension by the National Energy Board.

The North Montney project, a $1.7 billion pipeline that would feed natural gas into the Prince Rupert Gas Transmission line, which would supply Petronas’ PNW LNG plant in Prince Rupert, was supposed to have already begun by June 10, 2016.

But foot-dragging at the federal level has resulted in repeated delays in issuing an environmental certificate for the $36 billion PNW LNG project.

A decision was supposed to have been made by the Canadian Environmental Assessment Agency (CEAA) in June.

The decision was pushed back, however. The new deadline for the CEAA to either issue or deny an environmental certificate is October 2.

Until the CEAA issues a certificate, and until Petronas’ board of directors give the go-ahead on a conditional final investment decision, work can’t start on either the North Montney project or the $5 billion Prince Rupert Transmission pipeline.

On Thursday, September 15, the NEB agreed to extend a sunset clause for the North Montney project. NOVA Gas Transmission Ltd., a subsidiary of TransCanada Corp. (TSX:TRP), which would build the Prince Rupert Gas Transmission line, now has until June 10, 2017 to begin work.

That new date matches up with speculation that Petronas may not pull the trigger on an FID right away, even if it gets the green light in the coming weeks, but may wait until 2017.

Nova’s North Montney project is a new 305-kilometre pipeline that would bring natural gas from an area northwest of Fort St. John and connect into the 900-kilometre Prince Rupert Gas Transmission line, which will run from Hudson’s Hope to Prince Rupert. The two pipeline projects – totalling roughly $7 billion – would employ thousands of workers and take roughly two years to build, according to TransCanada spokesman Matthew John.

[email protected]