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Federal regulator to decide oversight for C$6B TransCanada pipeline to LNG plant


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Federal regulator to decide oversight for C$6B TransCanada pipeline to LNG plant

Canada's federal energy regulator will hold hearings to determine whether a TransCanada Corp. pipeline that would supply an LNG export facility in British Columbia falls within its jurisdiction, which would complicate the project's approval process.

In a preliminary examination, the National Energy Board, or NEB, found enough evidence to launch a more in-depth investigation into who should regulate the Coastal GasLink pipeline. While that interim judgment does not indicate its opinion of the merits of the application, the board said in a Dec. 11 statement that it will hold hearings into the matter in March 2019. If it determines that the licenses issued by British Columbia are not valid, TransCanada's C$6.2 billion pipeline would need to go through the NEB.

TransCanada has already started contracting for the project, and construction is set to start in early 2019.

"The decision of the board following this hearing will not in itself allow for the construction or operation of the project," the statement on the board's website said. "Rather if, following this hearing, the board determines that it ought to take jurisdiction of the project, it would require a separate application and hold a separate hearing to determine whether to approve the project."

TransCanada sought approval from British Columbia authorities to build the line because it would originate within the province and terminate at the Royal Dutch Shell PLC-led LNG Canada Development Inc. project in Kitimat, British Columbia. The NEB regulates interprovincial and international energy transportation.

At issue is the 670-kilometer pipeline's ties to TransCanada's Nova Gas Transmission gathering system, which in part links the shale gas fields that straddle the Alberta-British Columbia border with Alberta's pipeline grid. Activist and pipeline opponent Michael Sawyer filed the objection to provincial jurisdiction. In October, the NEB notified federal and provincial officials that it was reviewing the complaint, which it received in July.

The current proceeding "is not about whether to approve the project, or whether it is in the public interest," the NEB said. "The board will not consider issues that are typically relevant to a determination of whether to approve a project application." Those issues include the economic benefits of the project its impact on any other rights and interests.

The hearings come at a time of heightened frustration with federal government actions concerning pipelines. Thousands of pro-pipeline protesters have shown up at Alberta speeches by Prime Minister Justin Trudeau and other members of his government in the wake of decisions that have stalled construction of lines to carry petroleum products out of the country. Pipeline constraints have led to oil production cuts and job losses. The Trudeau government has touted Shell's decision to sanction the Kitimat facility as one of its successes in energy policy.

Further complicating the situation is the planned phase-out of the NEB. The federal government is in the final stages of approving a bill that would see the board replaced with two separate federal regulators. That new legislation could be in place before the Coastal GasLink hearings.