On January 5, 2015, the Province of British Columbia issued a
direction (the "Direction") to the
British Columbia Oil and Gas Commission
("OGC") prohibiting the OGC from issuing
permits to convert LNG facility pipelines, which are built to
support liquefied natural gas ("LNG")
facilities, into pipelines for transporting oil or diluted bitumen.
The Direction prohibits the OGC from permitting project proponents
to convert natural gas pipelines supplying LNG facilities to
pipelines carrying oil.
While the Province has stated that other pipeline projects may
be added to the list in the future, currently "LNG Facility
pipeline", as defined in the Direction, includes the following
Pacific Trail Pipelines Project (for Kitimat LNG)
Coastal GasLink Pipeline Project (for LNG Canada)
Eagle Mountain-Woodfibre Gas Project (for Woodfibre LNG)
Pacific Northern Gas Looping Project (for Douglas Channel
Prince Rupert Gas Transmission Project (for Pacific Northwest
Westcoast Connector Gas Transmission Project (for Prince Rupert
The Direction is in response to concerns raised by First Nations
about long-term pipeline use and in particular the potential
adverse effects of transporting oil or diluted bitumen by
pipelines, such as spills.
The Direction comes on the heels of TransCanada's proposed
Energy East Project, which will transport oil sands product from
Alberta to a marine facility in Quebec and which will involve the
conversion of an existing natural gas pipeline to oil. While
pipeline conversion is relatively rare in the oil and gas industry,
it is clear the BC government intends to prevent any conversion of
LNG pipelines within the province.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
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