LNG Canada reaches equity deal with 5 First Nations

Shell-operated LNG Canada and its joint venture partners have agreed to an equity option agreement with MNT Investments, a limited partnership consisting of the economic development organizations of five neighbouring First Nations, Canada’s flagship LNG project announced on July 14.

Under the terms of the agreement, MNT Investments can invest up to $1 bn to purchase a majority equity ownership interest in a special purpose entity that would buy LNG Canada’s Phase 2 storage tank for the super-chilled fuel.

The storage tank would be leased to LNG Canada for the operation life of the facility. The transaction that includes the Gitga’at First Nation, Haisla Nation, Kitselas First Nation, Gitxaała Nation, and Kitsumkalum would mark the biggest indigenous ownership position in a major Canadian infrastructure project.

The equity deal is conditional on LNG Canada taking a positive final investment decision (FID) on the Phase 2 expansion project, which is expected to occur before the end of the year. The expansion project has been gaining momentum with Fluor Corporation receiving limited notice to proceed for construction of Phase 2 in June.

The equity option agreement is conditional on LNG Canada’s JVPs approving their proposed Phase 2 expansion in Kitimat, British Columbia, in the traditional territory of the Haisla Nation. A Final Investment Decision for Phase 2 is being targeted by the end of 2026.

“Our announcement reflects our continued commitment to reconciliation by creating a pathway for Indigenous equity in our proposed Phase 2 expansion,” Chris Cooper, LNG Canada President and CEO said in a statement.

“This agreement recognizes that Indigenous Nations should have the opportunity to participate in major investments like Phase 2, not only through jobs, training, procurement and community benefits, but also through long-term ownership and value creation at a global scale,” Cooper added.

The project located on Haisla Nation territory in Kitimat, British Columbia about 700 km north of Vancouver, exported its first cargo to South Korea in June last year. Last month, it marked the delivery of its 100th cargo.