Export Licence – LNG
Orca LNG Ltd. (“Orca LNG”) applied for a licence to export gas as liquefied natural gas (“LNG”) pursuant to section 117 of the National Energy Board Act. Orca LNG requested the licence for a period of 25 years, starting on the first date of export, at a point located at the loading arm of a proposed natural gas liquefaction terminal near Prince Rupert, British Columbia.
Orca LNG applied for an export volume of 1,344 Bcf, or 38.06 billion cubic metres annually. The maximum quantity of the licence would be for 31,800 Bcf, or 901 billion cubic metres.
Orca LNG submitted that the quantity of LNG proposed for export would not exceed the surplus remaining after allowance for foreseeable consumption in Canada. Orca LNG provided two reports forecasting Canadian consumption, long term gas supply and demand forecasts, and an outlook of Canadian LNG exports. Orca LNG’s reports noted that Canada’s gas markets were open and liquid, as well as supplied by a robust resource base. Orca LNG included nearly all of the NEB approved exports in its forecasts, up to 21.2 Bcf/d, despite Orca LNG’s submission that the full approved LNG export volumes would be unlikely to materialize.
The NEB was satisfied that the resource base in Canada was sufficiently large to accommodate the reasonably foreseeable Canadian demand, as well as the LNG exports proposed by Orca LNG. The NEB also noted that the evidence provided by Orca LNG was generally consistent with the NEB’s own market monitoring information, and further agreed with Orca LNG that not all LNG export licences issued by the NEB will be used to their full extent. On this basis, the NEB found that Orca LNG’s projections were reasonable, and that there would be sufficient resources to meet Canadian demand plus the forecasted level of LNG exports.
Orca LNG requested an annual 15 percent tolerance to the amount of LNG exported in a given 12-month period, and also requested a sunset clause whereby the licence would expire ten years from the date of issuance if exports have not commenced on or before that date.
The NEB approved the requested 15 percent annual tolerance, noting that the maximum term quantity of the licence is inclusive of the 15 percent tolerance amount. The NEB also accepted the request for a sunset clause, noting it to be generally consistent with NEB practice.
The NEB approved the requested point of export of LNG at the outlet of the loading arm of a proposed terminal located near Prince Rupert, British Columbia.
The NEB issued the licence to Orca LNG, subject to approval of the Governor in Council, having found that the quantity of gas to be exported by Orca LNG would be surplus to Canadian needs.
