B.C. Says Its Committed To Major Northern B.C. Project

Nickle's Energy Analects
2 July 2008

The British Columbia government says it is inviting the private sector to partner with it and build the proposed $400-million Northwest Transmission Line (NTL), which is expected to bring economic development to the northwest sector of the province.

"The province remains as committed as we were last year to building this transmission line," Energy, Mines and Petroleum Resources Minister Richard Neufeld said in a statement. "We have $250 million on the table and are challenging industry to join us, put a plan and financing forward to make the Northwest Transmission Line a reality."

NTL was put on hold when construction of the Galore Creek mine was suspended by NovaGold Resources Inc. and Teck Cominco Limited last November.

Last year, the province, BC Hydro and Power Authority and British Columbia Transmission Corporation (BCTC) announced the project, which would have extended the electricity grid and help support economic diversification in the area.

The Galore Creek Partnership was formed by NovaGold and Teck Cominco to arrange funding to construct the line.

Since the project cancellation, the government has talked to mining companies across the province about sharing in the cost of constructing NTL.

In support of the project, the Northwest Power Line Coalition -- including representation from industry, First Nations and communities, the Mining Association of B.C. and the Association of Mineral Exploration of B.C. -- released preliminary results of a study that determined that NTL could attract $3.5 billion in investment and bring eight mining projects to the northwest. This would include 2,000 jobs and more than $300 million in economic activity, the study noted.

Meanwhile in another energy infrastructure development in the north, the Pacific Trail Pipelines Limited Partnership received an environmental assessment certificate for the Kitimat-Summit Lake project. Environment Minister Barry Penner and Energy, Mines and Petroleum Resources Minister Richard Neufeld made their decision to grant the EA certificate after considering a comprehensive review led by B.C.'s Environmental Assessment Office (EAO).

The project comprises constructing and operating a 463-kilometre natural gas pipeline between Kitimat and Summit Lake, including one new compressor station. The proposed system is intended to connect to the existing Pacific Northern Gas Ltd. pipeline and convey supply from the proposed Kitimat liquefied natural gas terminal to the Spectra Energy Gas transmission (SEGT) system.

In addition to the provincial EA, the project also requires approvals under the Canadian Environmental Assessment Act. A harmonized review led by B.C.'s EAO was initiated in accordance with the Canada/B.C. agreement for environmental assessment cooperation.

The B.C. government advised that the federal environmental assessment process is ongoing.

Before the project may proceed, the proponent must also obtain the necessary provincial and federal permits and authorizations.

The provincial environmental assessment certificate contains numerous commitments that the proponent must implement throughout various stages of the project, including:

- assessing the erosion potential of soils and implement adequate erosion controls;

- mitigating potential loss or degradation of instream fish habitat;

- monitoring water quality in the Morice Water Management Area;

- developing a hydrostatic test plan to manage discharge water quality, temperature and withdrawal volumes;

- mitigating potential affects on wildlife and habitat; and

- managing public access into previously inaccessible areas.

Capital costs for the Kitimat-Summit Lake project are estimated at $1.1 billion.

The project will cross provincial and local government jurisdictions. Once the project is in operation, it is estimated that the proponent will pay at least $74 million in provincial and local government taxes over the anticipated 50-year life of the pipeline. The project is expected to create approximately 1,200-1,500 jobs over a 24-month clearing and construction phase.