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Nova Gas seeks extension of North Montney sunset clause

NOVA Gas Transmission Ltd. (NGTL) has applied to the National Energy Board for a one-year extension to the sunset clause for its North Montney project, citing continuing uncertainty about the timing of Progress Energy’s Pacific NorthWest LNG project.
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Regulatory approvals will expire unless Nova Gas begins construction of the North Montney project by June 10, 2016, says the company in asking the board to extend the sunset clause to June 10, 2017. File Photo

NOVA Gas Transmission Ltd. (NGTL) has applied to the National Energy Board for a one-year extension to the sunset clause for its North Montney project, citing continuing uncertainty about the timing of Progress Energy’s Pacific NorthWest LNG project.

The regulatory approvals will expire unless NGTL begins construction of the North Montney project by June 10, 2016, says the company in asking the board to extend the sunset clause to June 10, 2017. 

“Extending the deadline for construction will not substantively or adversely impact any party interested in, or impacted by, the project,” the company says.

Although it has been preparing to begin construction of the project through pre-construction certificate conditions and other activities, NGTL says it will not be in a position to start construction by the required date due to circumstances beyond its control.

In its application to the board, the company notes that while the federal environmental review for Pacific NorthWest is progressing, federal Minister of Environment and Climate Change Catherine McKenna recently granted a three-month extension to the legislated timeline for that project. 

“As a result, there is continuing uncertainty regarding the timing of when that review process will conclude and any conditions that might accompany an approval,” says NGTL.

Should the LNG project receive the necessary federal approvals, NGTL says it understands that Progress will need to evaluate the conditions of those approvals in combination with other relevant information before it will be in a position to make a final investment decision. Following a positive investment decision, NGTL says it will also need to analyze its construction schedule based on Progress’s commercial requirements.

The federal government last year approved the 42-inch, $1.7-billion North Montney pipeline project with 45 conditions as recommended by the NEB. The pipeline will transport up to 2.1 billion cubic feet of natural gas per day from Northeast B.C. to the existing NGTL system, where it can be sold to markets in Alberta and, through a separate pipeline, to the proposed Pacific NorthWest LNG terminal at Lelu Island near Prince Rupert.

- Daily Oil Bulletin