On July 21, 2014, the BC Oil and Gas Commission (OGC) enacted the Liquefied Natural Gas Facility Regulation (LNG Regulation) under the authority of the Oil and Gas Activities Act (OGAA). On the heels of BC’s increasing emphasis on the liquefied natural gas (LNG) industry, the LNG Regulation expands and updates the sparse LNG-related provisions which were previously in the Pipeline and Liquefied Natural Gas Facility Regulation, which consequently has now been amended by removing the LNG provisions and been renamed the Pipeline Regulation. In addition, the Consultation and Notification Regulation under the OGAA was amended to include consultation and notification requirements for proposed activities that include LNG facilities.
The new LNG Regulation is branded by the OGC as a “technical regulation designed to comprehensively address regulatory aspects associated with proposed small- and large-scale LNG facilities”. The OGC has stated the LNG Regulation is designed to be flexible enough to cover any export facility – small or large; on- or off-shore; constructed entirely in BC or where facility modules are constructed and assembled outside of BC and transported to the project site. The LNG Regulation’s comprehensive framework includes provisions related to:
- permitting application process;
- construction, engineering design and LNG siting requirements;
- site restoration after construction;
- pre-operation testing, hazard analysis and risk assessment;
- safety and loss management programs;
- emergency planning and response;
- flaring and venting limits; and
- noise and light control.
The OGC has stated that while parts of the LNG Regulation are prescriptive, others provide a choice to applicants and the LNG Regulation allows proponents to propose alternative approaches as long as these alternatives meet or exceed public safety and environmental protection requirements. The LNG Regulation also contains a general exemption provision allowing an official to exempt an LNG facility permit holder from complying with one or more of the provisions in the LNG Regulation.
As a companion to the LNG Regulation, the OGC released its Liquefied Natural Gas Permit Application and Operations Manual (Manual), which is a new document intended to provide guidance to applicants that wish to construct and operate LNG facilities. The Manual outlines the requirements and procedures for permit applications and the regulatory milestones and requirements during the construction, operation and site restoration of the facility. It also contains a useful summary of other related elements of the regulatory environment regarding LNG facilities, including references to regulation of water use by the OGC.
LNG proponents can be expected to take significant interest in the LNG Regulation as it will form an essential part of the developing regulatory regime for LNG in BC.