Canada signals readiness to back LNG boom with go-ahead for $7.4 billion project

September 16, 2025, by Melisa Cavcic

As countries around the world prepare for massive energy infrastructure build-out, Canada is laying the groundwork to strengthen its trade might and energy security by giving the green light for a liquefied natural gas (LNG) project, which is being developed on the country’s northwest coast to export lower-carbon LNG to markets in Asia. This approval allows the project to move to the next stage of seeking all required permits and authorizations.

Ksi Lisims LNG concept; Source: Western LNG

With an environmental assessment certificate now in hand, the Ksi Lisims LNG project, proposed by the Nisga’a Nation, Rockies LNG, and Western LNG, is ready to start obtaining other permits and authorizations to build and operate two floating liquid natural gas structures at Pearse Island in northwestern British Columbia, employing an average of up to 450 workers during construction and having a permanent workforce of up to 250 people.

British Columbia’s Environmental Assessment Office (EAO) conducted an assessment of the project on behalf of the federal government under the substitution provisions of the Impact Assessment Act (IAA). While this is the first substituted assessment to be approved under the amended IAA and B.C.’s Environmental Assessment Act (EAA), two other projects are currently under review using the same process.

Julie Dabrusin, Minister of Environment and Climate Change, decided to approve the development under the IAA, following the substituted impact assessment conducted by the government of British Columbia and cooperative work with the Nisga’a Nation, aligned to achieve ‘one project, one review’ for assessments.

The minister’s decision, which focused on the project’s potential adverse effects within federal jurisdiction, as the assessment found likely effects of the project on some of the areas of federal jurisdiction to be significant, but only to a limited extent when mitigation measures are considered, indicates these effects are justified in the public interest.

Part of the overall context for this determination stems from broader sustainability considerations, such as economic reconciliation with Indigenous Peoples, supporting self-determination for the Nisga’a Nation, diversification of Canada’s trade, and potential positive economic outcomes for regional communities.

Dabrusin highlighted: “Canadians expect strong environmental protection alongside sustainable economic growth. My decision reflects a collaborative, transparent process – led by the province, supported by federal expertise, and shaped by meaningful Indigenous leadership. We believe the project will contribute to sustainability, reconciliation, and Indigenous economic self-determination.”

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It is believed that the work of the Impact Assessment Agency of Canada (IAAC) played a critical role in advancing the project, as IAAC supported the substituted assessment by contributing federal expertise, consulting Indigenous groups on proposed federal conditions, and ensuring the process met all federal requirements under the IAA through B.C.’s process and on its timelines.

After Indigenous groups expressed concerns about the broader effects of increased marine shipping activities along the north coast, IAAC collaborated with Indigenous communities and federal partners to develop conditions to minimize project-related effects.

Recognizing that these concerns extend beyond the scope of this project, the federal government is said to be carefully considering B.C.’s recommendations on the wider implications of marine shipping and remains committed to ongoing dialogue with Indigenous groups.

The Nisga’a Nation, Rockies LNG, and Western LNG now need to comply with legally binding conditions set out in the minister’s decision statement, encompassing measures to reduce adverse effects on fish and birds, safeguard Indigenous health and socio-economic conditions, and protect cultural heritage and traditional land use.

The proponents are also required to make accommodations for potential impacts on the rights of Indigenous Peoples, as follow-up programs will be established to verify the accuracy of the assessment, determine the effectiveness of mitigation measures, and engage with Indigenous Peoples throughout the project’s lifecycle.

This federal decision on the Ksi Lisims LNG project aligns with Canada’s commitment to fast-tracking nation-building infrastructure that strengthens diversified trade, advances sustainable resource development, supports Indigenous economic development, and contributes to the country’s long-term competitiveness as a reliable partner in global energy markets.

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While the project is currently estimated to cost approximately $7.4 billion (around CAD 10 billion), the research done by the Institute for Energy Economics and Financial Analysis (IEEFA) suggests that the cost could surge to $19.2 billion (about CAD 26 billion), depending on final design, infrastructure scope, and market conditions due to the evolving financial landscape surrounding major energy infrastructure projects.

The 12-mtpa natural gas liquefaction and marine terminal project is envisioned to receive 1.7–2 billion cubic feet of natural gas per day and export it overseas once commercial operations start in late 2028 or 2029.

The project secured a 40-year export license from the Canada Energy Regulator (CER) two years ago. The first LNG offtake agreement was inked with Shell.