Licence to Export – Propane
Pembina NGL Corporation and Pembina Resource Services Canada, by its managing partner 1195714 Alberta Ltd., and Pembina Infrastructure and Logistics LP by its managing partner 1598313 Alberta Ltd. (collectively, “Pembina”) applied to the NEB pursuant to section 117 of the National Energy Board Act (the “NEB Act”), for a licence to export propane (the “Licence”). Pembina sought the following terms in its application to export propane:
(a) A 25 year licence term starting on the date of first export;
(b) An included 15 percent annual tolerance, and a maximum annual export quantity of 5,003,420 m3 or 31,471,511 barrels;
(c) A maximum term quantity of 125,085,500 m3 or 786,762,775 barrels over the term of the licence;
(d) A point of export located at either:
(i) A marine export terminal on the west coast of Canada; or
(ii) Points along the Canada-United States border at railway crossings (specifically at Coutts, Alberta, Kingsgate, British Columbia, Huntington, British Columbia, and White Rock, British Columbia), and
(e) An early expiration clause whereby the licence would expire ten years from the date of approval by the Governor in Council issuing the licence if exports have not commenced.
The NEB agreed with Pembina, 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. While the NEB found that the estimates of recoverable propane were generally less reliable than for natural gas, the NEB also agreed with Pembina that a resource assessment for propane would have required a significant amount of work to complete, and was not likely to vary significantly from present estimates. The Board also held that the estimates provided in the application were generally consistent with the NEB’s own monitoring effects. However, the NEB did note that it would have been much better served if such information was available to it in making a surplus determination under section 118 of the NEB Act.
The NEB determined that the evidence before it demonstrated that propane resources were well above any plausible demand scenario given the high supply situation for propane, and that the proposed exports were considered small in the context of the North American market.
The NEB therefore granted the export licence to Pembina as applied for.
