Canada aboriginal community pushes back against Petronas LNG plan

May 8, 2015 9:50 PM

By Julie Gordon

VANCOUVER, May 8 (Reuters) - Members of a Canadian aboriginal community edged closer to rejecting a roughly C$1 billion ($827 million) deal with Malaysia's Petronas to support a liquefied natural gas export terminal, voting against the offer in the first two of three polls.

Members of the Lax Kw'alaams First Nation in the British Columbia communities of Port Simpson and Prince Rupert rejected the proposed benefit package in separate votes held this week.

A third poll will be held in Vancouver on Tuesday, with the results of all three informing the final decision of the mayor and council of the 3,600-member aboriginal band.

The Lax Kw'alaams are one of numerous aboriginal communities in talks with Petronas on the development of the $11 billion Pacific NorthWest LNG project, which is part of a broader $35 billion investment by the Malaysian company in Canadian natural gas.

Opponents of the project say it poses a threat to a salmon habitat next to the proposed terminal site on Lelu Island, and have concerns about the environmental impact of the development.

The company has said it is committed to protecting the fish and their habitat, and has already made numerous design changes to address community concerns. A federal environmental review of the proposed terminal is currently underway.

The mayor of Lax Kw'alaams, Garry Reece, said he would not comment on the process, although Facebook posts by community members confirmed the offer was voted down in both polls this week.

The offer, as outlined in a memo by the Lax Kw'alaams council and posted online, includes some C$1 billion in cash from Petronas over a 40 year period, along with a land package worth roughly C$108 million from the provincial government.

The Metlakatla, a 900-member aboriginal community based just a few kilometers from the proposed terminal site, reached a 40-year benefit deal with Petronas late last year. The Kitselas First Nation have also signed an agreement.

Petronas has said it hopes to make a final investment decision on the project by the end of June.

($1 = 1.2090 Canadian dollars) (Reporting by Julie Gordon. Editing by Andre Grenon)