Canada, BC government approve Ksi Lisims LNG project on Pacific coast

By Amanda Stephenson

Sept 15 (Reuters) - Canada's federal government and the province of British Columbia have approved the Ksi Lisims LNG project, a proposed liquefied natural gas export terminal to be built on the country's northwest Pacific coast.

The Canadian government under Prime Minister Mark Carney is aiming to accelerate the construction of natural resource projects to boost the economy and reduce potential impacts from U.S. tariffs.

The approval issued on Monday formally authorizes Ksi Lisims under the Impact Assessment Act, the sweeping regulatory framework that governs major infrastructure projects in Canada.

It sets the stage for a possible final investment decision before the end of the year by the project's proponents - Houston, Texas-based Western LNG; a consortium of Canadian natural gas producers called Rockies LNG; and the Nisga'a First Nation, who own the land the Ksi Lisims site is located on.

The proponents have said construction could begin this year, with the site, located on B.C.'s northwest coast near the community of Gingolx, operational by 2029.

With a planned capacity of 12 million tons per year, Ksi Lisims could become Canada's second-largest liquefied natural gas export terminal, after Shell-led LNG Canada, which began operations this year.

Its proponents say Ksi Lisims will have one of the lowest carbon intensities of any LNG export facility in the world, as it is being designed to be powered by renewable hydroelectricity.

Still, B.C. Hydro's capacity to meet the project's renewable electricity needs by the target date remains uncertain.

Both Shell SHEL.L and TotalEnergies TTEF.PA have signed 20-year LNG purchase agreements with Ksi Lisims, whose Pacific coast location offers shorter shipping times to Asian markets than U.S. Gulf Coast competitors.

Construction is already under way on the 900-km Prince Rupert Gas Transmission pipeline, which will transport natural gas from the shale fields of northeast B.C. to the Ksi Lisims facility.