TotalEnergies signs LNG deal as B.C. project’s pipeline costs soar to $12-billion

TotalEnergies of France has signed a deal to buy liquefied natural gas from the planned Ksi Lisims LNG facility in British Columbia, but the Nisga’a Nation-backed project must first await the fate of the associated pipeline whose estimated costs have soared by billions.

Ksi Lisims said Monday that TotalEnergies has agreed to a 20-year pact to purchase two million tonnes a year of LNG, or one-sixth of the planned production.

It marks the second LNG purchase agreement for Ksi Lisims, after one announced last year with a unit of London-based Shell PLC SHEL-N, also for two million tonnes a year.

TotalEnergies also said it has acquired a 5-per-cent stake in Houston-based Western LNG, which co-owns the pipeline project and is a partner in Ksi Lisims. The French company has the option to buy a direct 10-per-cent stake in the future LNG export facility.

The transactions were announced as the B.C. government reviews an environmental regulator’s draft report in order to rule on the Prince Rupert Gas Transmission (PRGT) proposal.

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The BC Environmental Assessment Office’s 24-page draft report, obtained by The Globe and Mail, said PRGT anticipates the capital costs of the natural gas pipeline could range from $10-billion to $12-billion – up sharply from previous estimates of $5-billion in 2014.

PRGT would feed the $10-billion Ksi Lisims facility, which is undergoing an environmental review for exporting the fuel from Nisga’a territory.

“It is especially meaningful to see Ksi Lisims LNG progressing steadily toward construction,” Eva Clayton, elected president of the Nisga’a Lisims government, said in a statement on Monday.

PRGT initially received its environmental assessment certificate in 2014, and won approval for a five-year extension in 2019, giving the project until last November to substantially start pipeline construction on Nisga’a territory to prevent the certificate from expiring.

The B.C. environmental regulator prepared the draft report to inform provincial Environment Minister Tamara Davidson in making a ruling on PRGT’s fate. She has the option to delegate the decision on the pipeline plans to Alex MacLennan, the regulatory office’s chief executive assessment officer.

“Ultimately the determination is made by the decision maker on a case-by-case basis by considering all relevant facts related to the project,” according to the draft report.

The Nisga’a and Western co-own PRGT. They are hoping to receive a positive decision that would pave the way for extending the environmental assessment certificate for the life of the project.

Western’s backers include an affiliate of Blackstone Inc. BX-N, the New York-based investment management company.

The Nisga’a, Western and a group of natural gas producers named Rockies LNG are partners in Ksi Lisims.

Plans call for construction of a 750-kilometre pipeline that would stretch from northeast B.C. to Pearse Island in northwest British Columbia. Floating production facilities, to be built in South Korea, are scheduled to be opened by Ksi Lisims on Pearse Island in 2029, with other vessels exporting LNG to Asia.

Gitanyow hereditary chiefs and several Gitxsan Nation leaders have opposed the contentious pipeline route, which would cross their traditional territories.

Tara Marsden, sustainability director for the Gitanyow hereditary chiefs, said PRGT has fallen short of meeting the threshold for what constitutes a substantial start.

But PRGT said in a 90-page filing in late 2024 to the environmental regulator that it has invested nearly $584-million in the pipeline project. PRGT said it spent $70-million in 2024 to clear 42 kilometres of the right-of-way, install nine bridges and upgrade access roads.

In mid-2024, the Nisga’a and Western acquired PRGT from Calgary-based TC Energy Corp TRP-T.

The PRGT route was originally intended to extend nearly 900 kilometres from northeastern B.C. to Lelu Island near Prince Rupert, and supply natural gas to Pacific NorthWest LNG.

Malaysia’s state-owned Petronas cancelled the Pacific NorthWest joint venture in 2017.

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Groups opposed to PRGT include the Skeena Watershed Conservation Coalition, Wilderness Committee, David Suzuki Foundation, Dogwood, Stand.earth, Sierra Club and Northwest Institute.

Ecojustice is representing the Kispiox Band, Kispiox Valley Community Centre Association and Skeena Watershed as petitioners in a court case that names the BC Energy Regulator (BCER) and PRGT as the respondents.

The petitioners are seeking a judicial review to overturn the BCER’s decision last year to allow construction activities by PRGT on a stretch of Nisga’a territory dubbed Section 5B.

“The BCER took the arbitrarily defined Section 5 permit and further divided it into Section 5A and Section 5B,” said Ecojustice, the country’s largest environmental law charity, in a filing earlier this year in B.C. Supreme Court.

PRGT is striving to become the second major pipeline carrying natural gas from northeast B.C. to the West Coast for the purpose of exports. A group of Wet’suwet’en Nation hereditary chiefs has led a campaign opposing Coastal GasLink, the first export pipeline for natural gas across northern B.C.

Coastal GasLink, operated by TC Energy, will supply natural gas to the LNG Canada export terminal that is nearing completion of construction in Kitimat, B.C.

Coastal GasLink’s construction provoked blockades and countrywide demonstrations in 2020.

Janelle Lapointe, a senior adviser at the Suzuki Foundation, said the prospect of PRGT forging ahead could trigger conflict and violence.

“We risk repeating the same story as Coastal GasLink,” Ms. Lapointe said in a statement.