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NewTimes Energy Ltd. Application for a Licence to Export Liquefied Natural Gas (NEB Reasons for Decision)

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Licence to Export – Liquefied Natural Gas


NewTimes Energy Ltd. (“NewTimes”) 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 19.09 billion cubic metres (109m3) of natural gas, subject to a 15 percent annual tolerance;

(c) A maximum term quantity of 458.16 109m3 (or 16,173.60 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 near Prince Rupert, 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”).

NewTimes 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.

NewTimes submitted that the North American market was generally efficient, transparent, liquid, and capable of responding to changes in supply and demand through price. NewTimes submitted that it expected LNG exports from Canada would be limited, as there are no large buyers committed to purchasing long-term LNG from Canada. NewTimes 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 NewTimes, 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.

NewTimes submitted that it would act as exporting agent for third parties, and as such requested relief from the monthly filing requirements of Section 12 of the National Energy Board Act Part VI (Oil and Gas Regulations) and Section 4 of the National Energy Export and Import Reporting Regulations (“Reporting Regulations”). NewTimes requested filing quarterly reports in lieu of monthly reports for its obligations under the Reporting Regulations as NewTimes submitted that monthly reports may prejudice its competitive position.

The NEB granted NewTimes’ request for relief from Section 12 of the National Energy Board Act Part VI (Oil and Gas Regulations). The NEB also held that section 116 of the NEB Act does not require the holder of an export licence to be the owner of the natural gas, therefore the NEB found it unnecessary to include a term allowing NewTimes to act as agent for other parties. Therefore, the NEB held that, in acting in its capacity as agent, NewTimes was required to report export in accordance with the Reporting Regulations, and therefore denied NewTimes’ request for quarterly reporting. The NEB addressed NewTimes’ concern about exposing its competitive position, noting that the information supplied by an export licence holder is not necessarily the information that is published by the NEB in its market monitoring reports.

The NEB therefore granted the Export Licence to NewTimes consistent with the determinations set out in this decision.

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