Oil Sands Truth: Shut Down the Tar Sands

Warning: Corporate Redwash

Kitimat project worth $1 billion to First Nations

Scott Simpson,
Canwest News Service
Victoria Times Colonist
April 30, 2009

Some First Nations stand to gain more than $1 billion in profits, taxes
and business opportunities from a proposed liquid natural gas project in
northern British Columbia, Canwest News Service has learned.

Proponents of a $4-billion project that includes a 463-kilometre gas
pipeline and a liquefied natural gas plant at Kitimat are still ironing
out final details of a landmark agreement among aboriginal groups,
including Carrier Sekani Tribal Council and Haisla First Nation.

But the B.C. government has already committed $32 million on behalf of
First Nations that are seeking a 30-per-cent equity share of the pipeline
as well as tens of millions of dollars in annual benefits when the
liquefied natural gas plant is built.

B.C. announced April 8 an accord with 16 First Nations along the proposed
route, which would carry gas from northeast B.C. to a new deep-sea
terminal at Kitimat in support of offshore LNG shipments.

The province's announcement, however, did not capture the true magnitude
of the deal, according to spokesmen for Carrier Sekani and Haisla.

The deal takes place outside of the labourious B.C. treaty process, which
has yielded a scant handful of treaties after spending $1 billion on
lawyers, meetings and interim measures over nearly two decades of

If the Kitimat project is successful, the cash it generates over 30 years
for participating aboriginal governments will dwarf the amounts awarded in
any of those treaties.

According to Carrier Sekani tribal chief David Luggi, First Nations along
the pipeline route could realize cash flows of $540 million to $553
million over the life of the deal.

They're using $32 million from the province as an initial ownership stake
in the line and are hoping the federal government will match that amount.

Both the pipeline and the LNG plant have environmental approvals from the
provincial and federal governments, and proponents are currently in the
process of booking capacity on the pipeline.

Greg Weeres, a vice-president with Pacific Northern Gas, which is
developing the pipeline portion of the project, said the company "has yet
to execute our definitive legal agreement with the First Nations."

"We are confident that there is more good news to come and we are just
working at trying to co-ordinate when we may be able to execute those
agreements," Weeres said.

Luggi said that in order for the Carrier Sekani to fully participate in
the project, they will seek investors to help finance a 30-per-cent share
of the proposed pipeline.

Carrier Sekani pulled out of the B.C. treaty process two years ago after
concluding a treaty would not provide sufficient benefit for future

"A treaty is forever. This proposal is for three decades," Luggi said.

An environmental accord with the pipeline's developers is pivotal to the
deal, he said, including mitigating the impact that pipeline construction
will have on traditional territories of Carrier Sekani bands along the

"This is resolving the proposed ongoing infringement of our title, and the
cash flows in those three decades for all 16 First Nations along the route
would be in the range of $540 million to $553 million," he said.

The LNG plant would be situated on Haisla First Nation property at the
Kitimat deep sea port.

Haisla chief Steve Wilson said his people could receive up to $4 million
annually in lease payments and $14 million to $18 million per year in
property taxes.


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