Kitselas signs up for three LNG pipeline deals

The deals will provide the nation with $1 million right away

  • Tue Jan 27th, 2015 8:00am
  • News

The Kitselas First Nation has signed three pipeline deals with the province which will provide it with close to $1 million right away, additional payments which could amount to more than $4 million based on construction and a share of ongoing annual payments should natural gas ever start flowing through them.

The deals are tied to one pipeline, TransCanada’s Coastal GasLink which would serve the LNG Canada facility at Kitimat, and two pipelines destined for the Prince Rupert area – TransCanada’s Prince Rupert Gas Transmission to serve the Pacific NorthWest LNG plant on Lelu Island and Spectra’s Westcoast Connector Gas Transmission to serve Prince Rupert LNG, a BG Group project.

Dollar values of each deal, which are part of an overall provincial pipeline benefits program aimed at First Nations, are based on the number of kilometres a pipeline travels through a particular First Nation’s territory and other factors. The agreements are also meant to provide, says the province, the certainty needed in order for LNG developers to commit to construction.

For each of the three projects, in addition to upfront payments, the Kitselas are to receive payments based on construction – half when construction starts and half when a pipeline goes into operation.

In the case of Coastal GasLink, for example, the upfront payment amounts to $230,000 and construction payments work out to $575,00 when construction starts and $575,000 when the pipeline goes into operation.

The upfront payments were worth 20 per cent of the overall agreements for the Kitselas because they signed before the end of December, 2014.

Had they signed this year, that payment would have been reduced to 15 per cent.

Construction-related payments for the two pipelines bound for Prince Rupert area LNG plants could, however, vary depending upon how close one is built to the other.

Should a portion of one or other of the two pipelines be built within 70 metres of the other, the construction payment will be reduced.

“This considers the reduced impact that additional natural gas pipelines would have on a First Nation’s traditional territory if the pipelines are in close proximity to one another,” stated the province in releasing details.

In return for the money, the Kitselas First Nation has agreed to support the projects.

And it has agreed, as long as the province follows through with its obligations, not to “bring any court actions or proceedings that directly or indirectly challenge any government actions in relation to each natural gas pipeline project on the basis that the province has failed to consult or accommodate the Kitselas …” indicates one section of the agreement.

The Kitselas have also agreed not to “support or participate in any acts that frustrate, delay, stop or otherwise physically impede” development of the pipelines.

In an emailed statement, Kitselas chief Joe Bevan said, “it is important to ensure that members of our communities benefit from economic development on land that we have been interconnected with for generations. By partnering with B.C. today, we have secured the assurance that members of the Kitselas First Nation will share in the prosperity of a new LNG export industry in B.C.”

These agreements are also to be outside any land claims treaty signed between the Kitselas and the province.

And once a pipeline is in operation, the Kitselas are to receive a portion of an annual $10 million payment from the province to be divided between all of the First Nations who have traditional territory over which the pipeline crosses.

That amount per First Nation is to be decided between the First Nations by the middle of June or the province will step in and decide the matter.

The Kitselas are already beneficiaries of an earlier provincial benefits agreement tied to the Pacific Trails Pipeline which would serve the Chevron-based Kitimat LNG plant at Kitimat.

These agreements are separate from any economic impact agreements the Kitselas would sign with the pipeline builders themselves.

Late last year, the Kitselas did sign an impacts agreement with Pacific NorthWest LNG, a large plant which would be built on Lelu Island near Prince Rupert, which provided it with an amount upon signing and annual payments.

That was based on historical Kitselas fishing practices in the Skeena River area around Lelu Island. In return, the Kitselas have agreed to support the project which would be supplied by the Prince Rupert Gas Transmission line.