Letter Decision – Export and Import Licence
Saint John LNG Development Company Ltd. (“Saint John”) applied to the NEB for:
(a) A licence to export natural gas in the form of liquefied natural gas (“LNG”) (“Export Licence”); and
(b) A licence to import natural gas (“Import Licence”).
Saint John requested the following terms for its Export Licence:
(a) 25 year term starting on the date of the first export;
(b) Maximum annual export quantity of 8.12 billion cubic metres;
(c) Maximum term export quantity of 203.1 billion cubic metres;
(d) A point of export at the outlet of the loading arm of the LNG facility to be located in Saint John, New Brunswick; and
(e) An early expiry, or sunset clause, if exports have not commenced within 10 years of the issuance of the Export Licence.
Saint John requested the following terms for its Import Licence:
(a) 25 year term starting on the date of the first import;
(b) Maximum annual import quantity of 8.86 billion cubic metres;
(c) Maximum term import quantity of 221.51 billion cubic metres; and
(d) A point of import at which the Maritimes & Northeast Pipeline crosses the Canada-United States border near St. Stephen, New Brunswick or such other point as may be accessible over the term of the Import Licence.
Saint John submitted that the quantity of LNG proposed for export would not exceed the surplus remaining after allowance for foreseeable consumption in Canada.
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 Saint John. The NEB also noted that the evidence provided by Saint John was generally consistent with the NEB’s own market monitoring information, and further agreed with Saint John that not all LNG export licences issued by the NEB will be used to their full extent. On this basis, the NEB found that Saint John’s projections were reasonable, and that there would be sufficient resources to meet Canadian demand plus the forecasted level of LNG exports.
As part of the conditions of the Export Licence, the NEB approved a 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 issued the Export Licence and the Import Licence to Saint John as requested, subject to approval of the Governor in Council, having found that the quantity of gas to be exported by Saint John would be surplus to Canadian needs.
