The Globe and Mail: Published June 10, 2024; Updated June 11

The Haisla Nation and Pembina Pipeline Corp. PPL-T +0.49% increase are closer to approving a US$3.4-billion plan to export liquefied natural gas from British Columbia after Haisla members voted overwhelmingly in favour of backing the energy project.

Nearly 93 per cent of Haisla members who participated in a ratification vote on Cedar LNG supported plans by the elected band council to borrow money for the development, construction and co-ownership of the venture.

The Haisla have a 50.1-per-cent stake in Cedar while Calgary-based Pembina owns 49.9 per cent.

A final investment decision on Cedar could be made by the Haisla and Pembina by the end of June. The energy project in Kitimat won approvals last year from environmental regulators provincially and federally.

Of the 496 ballots cast recently in the Haisla’s ratification process for Cedar, 461 members voted in favour of plans by the band council to borrow up to $1.4-billion from the First Nations Finance Authority to help support the project.

Haisla chief councillor Crystal Smith confirmed that the project has reached a major milestone in completing the ratification process.

“That was one of the main, key hurdles that the project had to go through, specifically our Nation had to go through,” Ms. Smith said in an interview.

She added that she is optimistic about Cedar’s chances to forge ahead. “I think you can piece together the rest of the puzzle if you know projects and how they play out.”

The Kitimat project’s co-owners have estimated that Cedar will require US$3.4-billion in capital spending and US$600-million in other expenses, including interest paid through financing arrangements during construction, as well as transaction costs.

Cedar, which would have an annual export capacity of 3.3 million tonnes of LNG, is aiming to start shipping to Asia in late 2028.

The venture would rely on supplies of natural gas delivered through the Coastal GasLink pipeline project, which completed construction in October, with the Shell PLC-led LNG Canada megaproject as the primary destination in Kitimat.

Ms. Smith said it is crucial that the Haisla maintain the majority stake in the Cedar partnership with Pembina, which acquired its 49.9-per-cent stake in 2021.

“It’s absolutely imperative that our Indigenous community of Haisla are majority owners,” she said. “It’s important for all aspects when it comes to any type of governance structure and all of the decision-making ability so that it’s embedded as truly majority owned by an Indigenous community.”

Cedar’s floating liquefaction vessel would be built in South Korea. Cedar has plans that hinge on securing electricity from BC Hydro for powering electric motors that drive compressors for liquefaction.

“We work with all the customers that come and we do the best job we can in meeting their needs and their timelines,” BC Hydro chief executive officer Chris O’Riley said in an interview.

Baker Hughes to supply liquefaction technology for Cedar LNG project in Canada

Calgary-based ARC Resources Ltd. has agreed to be a major supplier of natural gas for Cedar, with a 20-year commitment to provide about 45 per cent of the project’s annual capacity.

Cedar would become the second LNG project within the Haisla’s traditional territory. The construction of LNG Canada has led to much-needed revenue for the Haisla through benefits agreements, and sparked economic development in and around Kitimat, notably in Kitamaat Village, the main community and seat of government of the Haisla.

LNG Canada plans to begin exporting natural gas in liquid form to Asia by mid-2025.

Ten years ago, there were more than 20 proposals in B.C. to export LNG to markets in Asia. Since then, dreams for Canada to become a major LNG player globally have faded.

Five B.C. LNG projects are actively pursuing exports using tankers: Cedar; LNG Canada’s potential Phase 2; Woodfibre LNG near Squamish; Ksi Lisims LNG on Pearse Island in northern B.C.; and FortisBC’s expansion plans for Tilbury LNG in the Vancouver suburb of Delta.

“Despite the clear economic benefits, the growth of Canada’s LNG industry faces challenges, such as regulatory hurdles and global competition,” according to a report written by Philip Cross and commissioned by Resource Works, a Vancouver-based research group, and the First Nations LNG Alliance.

The International Institute for Sustainable Development, however, warns that LNG facilities will undermine Canada’s climate commitments. “Environmentally, Canadian LNG is at odds with domestic climate obligations,” the institute said in a study released last week.

BRENT JANG, Business reporter, VANCOUVER