Frequently Asked Questions - Liquefied Natural Gas (LNG) - Export Licence Applications
- What is the Board’s process for reviewing an LNG export licence application?
- What does the Board consider when reviewing an LNG export licence application?
- What does a company file with the Board when applying for a LNG export license?
- How can someone participate in the Board’s review of an LNG export licence application?
- Do I need to apply to submit a comment?
- What happens if the Board finds an application incomplete?
- Does the Board consider the accumulative quantity of LNG exports?
- What does an export licence allow? Does it authorize the construction of LNG export terminals?
- Why isn’t the Board considering environmental matters in its review of LNG export licence applications?
- What is the Board’s role in monitoring the Canadian natural gas market?
1. What is the Board’s process for reviewing an LNG export licence application?
For LNG export licence applications, the Board uses a written process that includes a public comment period for impacted persons.
- When the Board receives an application for a long-term licence to export, we will review to determine if it is complete in order to begin the assessment process.
- If the application is deemed complete, the Board will issue direction to the Applicant to publically advertise a Notice of Application and Comment Period, typically advertised in national newspapers. This notice will provide instructions and information necessary to enable impacted persons to submit their views and outline the time period when comments will be accepted.
- Following the comment period, the Board will complete its review of the application and any submissions from impacted persons.
- Based on our assessment, the Board will approve or deny the application in a publically available Letter Decision. Board issuance of an export licence is subject to the Governor-in-Council approval.
The above process was adopted in 2012 following the implementation of the Jobs, Growth and Long-term Prosperity Act which removed the mandatory hearing requirements.
2. What does the Board consider when reviewing an LNG export licence application?
When reviewing an application, the Board considers whether or not the amount of natural gas proposed to be exported is surplus to Canadian demand (section 118 of the NEB Act). The Board considers requirements for future use in Canada, considering the trends in discovery of natural gas in Canada in making a determination on the surplus criterion.
The onus is on every Applicant to make its case that the surplus criterion is met.
3. What does a company file with the Board when applying for a LNG export license?
The Board’s Filing Manual and the National Energy Board Act Part VI (Oil and Gas) Regulations provide guidance to applicants on what to file in support of an LNG export licence application, including:
- The source and volume of gas proposed to be exported,
- A description of gas supplies, including Canadian gas supply, expected to be available to the Canadian market (including underlying assumptions) over the requested licence term,
- A description of gas requirements (demand) for Canada (including underlying assumptions) over the requested licence term, and
- The implications of the proposed export volume on the ability of Canadians to meet their gas requirements.
In addition, the Board requires information about the terms and conditions for the export licence that an Applicant is seeking. Typical terms and conditions relate to three aspects of the LNG export licence:
- what quantity of natural gas is proposed to be exported;
- when the licence will start and the length of the term of the licence (i.e. may be up to 25 years); and
- what is the location of the proposed export points.
4. How can someone participate in the Board’s review of an LNG export licence application?
During the Comment Period, specified in the published “Notice of Application and Comment Period”, impacted persons can submit their views on the application.
Impacted persons are advised to raise their concerns in their initial submission and provide all relevant information in support of it. The Board may consider information related to the question of whether the proposed export is surplus to Canadian needs. Submissions may be provided in either official language.
The Applicant has 10 days to respond to comments they receive from impacted persons regarding the surplus determination.
Following this, the NEB will review all information before it to make a decision on the application. The Board’s issuance of an export licence is subject to Governor-in-Council approval.
5. Do I need to apply to submit a comment?
No, there is no application to participate process. If you feel you are impacted by the application submit your views during the Comment Period, as per the published notice. Please note that your comments should relate to the surplus criterion.
6. What happens if the Board finds an application incomplete?
Should the Board determine that an application is incomplete we will communicate that via letter to the Applicant. The letter would also be accessible through the NEB website. The Applicant may file a new application at any time in the future.
7. Does the Board consider the accumulative quantity of LNG exports?
The Board evaluates each application on a case-by-case basis. Only if the Board determines that the proposed LNG exports are surplus to Canadian needs would a licence be issued. In addition to the regulatory process, the NEB believes market forces will ultimately determine which proposals will move forward. Since deregulation of Canadian gas markets in 1985, gas markets in North America have functioned efficiently and the Board expects they will continue to do so in the future.
The Board acknowledges that, taken together, the LNG licence applications that have been submitted to the Board represent a significant volume. But, gas export licences do not mandate exports, they only permit them. Further, all of the LNG ventures are competing for a limited global market. The Board has previously stated that it believes not all LNG export licences issued by the Board will be used or used to their full allowance (source: Woodside Energy, Letter Decision [Filing A65596]).
Also of note is the sunset clause that the Board generally includes as a condition on export licenses. Typically, the export of gas must commence within a set period of time from the date that the Governor in Council approves issuance of a licence. The licence would expire if the export of gas did not commence by that time.
8. What does an export licence allow? Does it authorize the construction of LNG export terminals?
An export licence is a stand-alone authorization to export gas from Canada. If new facilities are needed to enable the export, such as an LNG export terminal, authorizations will be required from other regulatory bodies or government agencies.
9. Why isn’t the Board considering environmental matters in its review of LNG export licence applications?
When reviewing an application for an LNG export licence, the Board must assess whether the gas proposed to be exported exceeds the surplus after taking into consideration foreseeable requirements for use in Canada.
As per section 118 of the NEB Act, the Board cannot consider matters that are unrelated to this criterion.
The NEB cannot consider environmental matters in export applications. Please see FAQs on the Jobs, Growth and Long-term Prosperity Act for more information.
A company may need to receive additional approvals from other regulatory or government bodies to move forward with their proposed infrastructure project (e.g. liquefaction terminal or associated pipeline).
10. What is the Board’s role in monitoring the Canadian natural gas market?
The Board regulates and monitors Canadian natural gas trade. The Board has technical expertise in gas market supply and demand fundamentals and geological resource assessment. The Board requires all exporters to report gas exports. This information is available to the public on the NEB website.
Gas market assessments, including long-term and short-term reports, are available on the Board’s website.
The NEB also regularly studies and provides reports on energy markets, including gas. For a full list, please see Energy Report - Natural Gas.
Please see the NEB’s Short-term Canadian Natural Gas Deliverability 2013-2015 - Energy Market Assessment, Fact Sheet and Energy Pricing Information for Canadian Consumers for more information on natural gas supply and pricing in Canada.
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