LNG plan could see huge benefits for Haisla

The Haisla First Nation has signed a Liquefied Natural Gas [LNG] framework agreement with British Columbia that could see the band benefit financially, provide jobs for members and help fast-track a major LNG facility near Kitimat.

The agreement allows the Haisla First Nation to either lease or purchase 700 hectares of land on the Douglas Channel and work with the natural gas industry to develop a LNG marine export terminal on the site. The price tag of the deal was not disclosed, but will be based in-part on a provincial assessment of the land value.

The agreement marks a major milestone toward the government’s commitment to have three terminals and connecting pipelines operating by 2020. The province says the deal could provide more than 1,400 ongoing jobs and generate an estimated $600 billion in economic activity over the next 30 years.

“At the end of the day for the Haisla First Nation the financial benefits will be huge, the rewards will be great and financial independence is important,” said Ida Chong, minister of Aboriginal Relations and Reconciliation during a press conference Sept 14. The benefits for First Nations in LNG jobs will be long and lucrative, she said.

The province is calling the agreement a stepping stone toward other framework agreements with BC First Nations.

“This is a great example of how it can work. We will continue to use this kind of model that we have today to advance as many kinds of agreements that we can around the province with as many First Nations who want to come to an agreement and talk to us about what is possible for their area.”

“It is a very exciting day for us to sign this agreement with the Haisla Nation,” said Chong. The deal sends a good message to the investor community, she said.

“This agreement says they can do business here and they should do business here.”

Following a five-year renewal period, the Haisla could possibly have the opportunity to lease for an additional 50 years.

Haisla Chief Ellis Ross said the Nation will be looking into ways they can capitalize on the agreement. Asked where the Haisla will get the revenue to invest in the land, Ross was tight-lipped.
“We find ways to finance these types of initiatives,” he said. “It will be up to the council to decide where the money will come from and when that time comes,” he added.

Asked if the First Nation had any concerns regarding the agreement this far? Ross said nothing has been voiced to date.
“I’m more interested to see who will actually step up to the plate and start proposing building the project on this territory,” Ross said. “It’s really up-in-the-air on whose proposal will get access to this land,” he added, explaining that “the Haisla have vested stakes and interest in any proposal going forward in the territory.
“This is just the start of a relationship,” continues Ross. “There’s a lot of technical and administrative work you have to undergo.
You’ve got to go through some financing exercises. You have to understand investment. You have to understand markets,” he said.

“What we really want to do is answer the land question for Haisla first,” he added.

Ross said the Nation is “already inundated with industry requests for the land.

“It is up to us to see who will be the successful component,” he said.

Currently, two LNG facilities and marine export terminals have received export licences from the National Energy Board—Kitimat LNG and BC LNG Douglas Channel. Other proponents are in various stages of assessing additional LNG facilities, including the recently announced LNG Canada.

In 2010, the Haisla Council separated community politics from economic development through the establishment of Haisla Business Operations (HBO), which makes long-term economic development decisions for the Nation.

Reporting to council’s Economic Development Committee, HBO’s role is to identify and assess economic opportunities, conduct negotiations with proponents, implement any agreements reached and manage the operational side of the arrangement for the benefit of the Haisla First Nation.

Meanwhile, the province says it hopes to get plans for the plant running by 2015. But Minister of Energy and Mines Rich Coleman, predicts that big industry proposals, such as Shell, are working toward a 2019 deadline.

In September 2011, British Columbia released its natural gas strategy detailing steps government will take to grow a viable LNG industry. Part of the strategy includes strengthening collaboration with First Nations, local communities, industry partners and other levels of government

As for costs, Coleman said taxpayers would not be investing in the LNG plan, explaining that private companies such as Shell Canada or others would carry the lion’s share of the costs.

“The land deal doesn’t affect provincial revenues,” Coleman said.
With the huge market for natural gas overseas, where product fetches four or five times more than in North America, Coleman said the resource would be exported to Asia.

Ross said open and active communication, transparent negotiations and accommodation of Aboriginal rights and title regarding any future land-use deal between the First Nation and the government is critical.

The province agrees.

“What I’ve learned over the years is that consultation is critical in ensuring that we have an understanding and respect for what First Nations want in order to benefit their reserve, lands, people and just their community as a whole. They want to participate in job creation. They want to participate in higher education. They want to participate in all that other British Columbians have. That is why we need to sit down and negotiate what is best and what can work best,” said Chong.