Licence to Export – Liquefied Natural Gas
Canada Stewart Energy Group Ltd. (“Stewart”) 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 25-year licence, starting on the date of first export;
(b) A 15 per cent annual tolerance, a maximum annual export quantity of 47.56 billion cubic metres (109m3) or 1,679 billion cubic feet (Bcf);
(c) A maximum term quantity of 989.3 109m3 (34,923 Bcf) over the term of the licence;
(d) A point of export at the proposed natural gas liquefaction terminal to be located near Stewart, British Columbia; and
(e) An early expiration clause where the licence will expire ten years from the date of Governor in Council approval of the issuance of the licence if exports have not commenced on or before that date,
(the “Export Licence”).
Stewart 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. Stewart submitted that in determining the supply and demand forecast, it only considered its own export volumes, submitting that no LNG export facility has reached a final investment decision.
Stewart submitted that the North American market was generally efficient, transparent, liquid, and capable of responding to changes in supply and demand through price. Stewart also 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 Stewart, 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 Stewart as applied for.
