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AltaGas DCLNG General Partner Inc., on behalf of AltaGas DCLNG Lease Limited Partnership Application for a Licence to Export Liquefied Natural Gas Reasons for Decision

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Licence to Export – Liquefied Natural Gas


AltaGas DCLNG General Partner Inc., on behalf of AltaGas DCLNG Lease Limited Partnership (“AltaGas DCLNG”) applied to the NEB pursuant to section 117 of the National Energy Board Act (“NEB Act”) for a licence to export natural gas in the form of liquefied natural gas (“LNG”) on the following terms and conditions:

(a) A term of 25 years starting on the issue date of first export;

(b) A maximum annual export quantity of 10.3 billion cubic metres (109m3), or 365 billion cubic feet, of natural gas;

(c) A maximum term quantity of 258.2 109m3 (9,125 billion cubic feet) of natural gas over the term of the licence;

(d) A point of export at the outlet of the loading arm of the natural gas liquefaction terminal to be located at District Lot 99, eight kilometers west of Kitimat, British Columbia; and

(e) An expiration clause where, unless otherwise authorized by the Board, the licence will expire after 10 years if LNG exports have not commenced on or before that date,

(the “Export Licence”).

AltaGas DCLNG submitted that the quantity of gas it sought to export did not exceed the surplus remaining after due allowance has been made for the reasonable foreseeable requirements for use in Canada, as required by section 118 of the NEB Act.

AltaGas DCLNG submitted that the North American market was generally efficient, transparent, liquid, and capable of responding to changes in supply and demand through price. AltaGas DCLNG also submitted that the resource base in Western Canada was very large, such that there were sufficient reserves for domestic demand over the 20-year term, as well as surplus for additional growth for either excess domestic demand or other export project as well. AltaGas DCLNG provided evidence that horizontal drilling and fracturing technology have sharply increased natural gas, natural gas liquids and crude oil supplies in North America. AltaGas DCLNG submitted a demand sensitivity analysis considering a 20 percent increase in Canadian demand over the term of the Export Licence, and found that it would not change its overall conclusions of adequate supply for domestic markets.

The NEB agreed with AltaGas DCLNG, holding that the exports did not exceed the surplus remaining after due allowance has been made for the reasonable foreseeable requirements for use in Canada as required by section 118 of the NEB Act. The NEB also held that the estimates provided in the application were generally consistent with the NEB’s own monitoring effects.

The NEB therefore granted the Export Licence to AltaGas DCLNG as applied for.

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