As part of a three-way agreement, Shell Canada Ltd. has agreed to withdraw plans to explore for natural gas in the Klappan area of northwest B.C. by relinquishing its tenures.
The agreement includes the provincial government and the Tahltan Central Council.
"Close relations with the aboriginal communities are important for our many business opportunities in British Columbia, and we are pleased to have found common ground on our petroleum and natural-gas tenure in the Klappan," said Lorraine Mitchelmore, president and country chair, Shell Canada Ltd.
"We now focus on growth opportunities with better commercial and geological prospects in northeast British Columbia."
According to the government, the Tahltan Nation has identified the Klappan area as having "significant cultural, spiritual and social values." The area is known to First Nations as Sacred Headwaters because it contains the Stikine, Nass and Skeena rivers, and has been the subject of a fight to protect it by environmental groups.
The province said the Klappan is an area of "vital salmon-bearing waterways … and as such has importance for all British Columbians who rely on those rivers." It added that it would not be issuing future gas and petroleum tenures in the region.
In a separate agreement, to recognize Shell's "lost, upfront capital" and rent payments paid to the Crown on the Klappan tenures, the province and industry will lead a new water recycing project, to be built by Shell. The province will issue $20 million in royalty credits to Shell for the project.
According to the government, royalty credits can be applied to an industry's payment to government once the infrastructure they are approved for is operating.
"They are not an expenditure of provincial funds," the government touted in a press release. "They are deductions that are made to future royalties owed to government."
