Friday, December 24, 2010

Haisla Nation reaches beneficial LNG agreement with resource company

An agreement between the Haisla Nation and  two Texas based resource companies, Apache Corporation and EOG Resources, is going to provide for a financial winfall for the Haisla and the opportunity for long term investment going forward.

Last week the Haisla Nation signed an agreement with the energy group that will see the two resource companies provide the Northwest first nation with  50 million dollars,  the Haisla chose to receive a cash deposit rather than hold a similar amount of share in the planned 4 billion dollar LNG shipment plant planned for their community by the Texas energy companies.

The Haisla based their decision to not seek a share of the project owing to the requirement that they would have had to raise their own equity portion of the project, an undertaking they decided not to move ahead with.

With that decision made, the Hailsa then made plans to distribute 8,000 dollars to each member of the First Nation over the age of 18, the remainder of the money to be transferred, estimated to be around 40,000 dollars will be put into investments to benefit the First Nation moving towards the future.

In addition to the financial aspect of the arrangement, the Haisla will also benefit from employment and business opportunities once the project gets underway.

The acceptance of the LNG project on Haisla land is a completely different scenario than that which faces  the controversial Enbridge pipeline development.

That project has run into no shortage of troubles in the last few months as a wide ranging coalition continues to try and stop that planned pipeline and terminal in Kitimat before it makes any further forward momentum.

The LNG terminal announcement and financial arrangement brings the long planned shipment of natural gas out of a Northwest port much closer to fruition than ever before.

CFTK TV 7  News-- Haisla accept $50M for LNG Stake
The Northern Sentinel-- Haisla sell KLNG option
Vancouver Sun-- Haisla Nation sells option on Kitimat LNG project

Long time Rupert residents will remember that it was back in the late 1970's that the prospect of LNG tankers arriving and departing on the north coast was planned for an area near Lax Kw'alaams, a project that never seemed to get much further than the design stage and some preliminary discussions.

The topic of LNG shipments from the region also were renewed by Pac Rim LNG project in the late 1990's, but again things never seemed to move beyond the disucssion phase.

Those discussions regarding the Lax Kw'alaams projects have made for more than a few reports and academic papers on the issue,  excerpts from  a few of those efforts can be found below.

Community involvement in "mega-project" planning : a case study of the relationship between the Lax Kw’alaams Indian Band and Dome Petroleum

Allies and Adversaries

Pac Rim LNG Project

The original  development which was planned for Grassy point near the First Nations community, floundered as the main proponent Dome Petroleum suffered financial setbacks during the financial troubles of the mid to late eighties.

Likewise, we haven't heard much more of the Pac Rim Plans since the turn of the calendar from the nineties to a new century.

Some thirty years later the Haisla have moved the prospects of LNG tankers to the horizon, negotiating a financial package that provides what has been descried as  "an immediate and substantial benefit" to members of their nation, as well as setting the stage for further development and investment in and by the Haisla.

With the formalities of Kitamaat portion of the project now complete, Apache resources will be moving its plans forward towards a completion date in  2014.

Towards that goal, KM LNG an affiliate of Apache Corporation filed a licence application with the Canadian National Energy Board seeking approval to export liquefied natural gas from the proposed Kitimat Terminal.

Apache Corporation  has a major natural gas development in Northeaster British Columbia with volumes of gas in production and now with the arrangement in place for a terminal, it would seem that Apache resources has most of its pieces in place to begin exporting natural gas out of Kitimat within the next three years.

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