British Columbia First Nation sued by members over LNG pipeline project

VANCOUVER, British Columbia (CN) — Two members of a northern British Columbia First Nation say their community was misled about the benefits they would receive from a pair of controversial natural gas projects.

The Prince Rupert Gas Transmission (PRGT) pipeline project has seen some controversy in recent years, including within the Nisg̱a’a Nation.

The pipeline is expected to transport upwards of two billion cubic feet of liquefied natural gas 800 to 900 kilometers every day from northeastern British Columbia to the similarly contested proposed Ksi Lisims LNG terminal near Prince Rupert, in the province’s north coast.

A new lawsuit adds onto that controversy, as two Nisg̱a’a Nation members claim the Nisg̱a’a Lisims Government’s decision to buy a stake in the PRGT project wasn’t in the best interest of the community.

The Nisg̱a’a Lisims Government partnered with Western LNG LLC to form the NW Infrastructure Limited Partnership, which bought the project from TC Energy Corporation in June 2024.

That agreement came with promises of long-term economic benefits to the Nisg̱a’a community. But Cecil Mercer and Stephen Nyce say their community was misled about those benefits.

The plaintiffs argue the projects’ viability are contingent on the export of LNG at a time when demand is on the decline.

“If LNG demand in target markets continues to decline because of price volatility, the projects’ assets risk becoming stranded, meaning that associated infrastructure will become obsolete before the end of its operational life due to the low-carbon energy transition,” Mercer and Nyce said in legal filings.

At the same time, costs associated with the projects have risen. The PRGT line was estimated in 2014 to run CA$5 billion, according to the lawsuit, which noted that projections sit at $10 billion or more today.

Though the Ksi Lisims project would be fully owned by Western LNG, the Nisg̱a’a Lisims Government is listed as a “proponent,” according to the lawsuit, and it would get some revenue from the project, which is expected to cost another $10 billion to $20 billion.

“The KLNG Project’s dependence on the PRGT Pipeline compounds the financial risk for the Nisg̱a’a Nation because [Nisg̱a’a Lisims Government] will rely on revenue from the KLNG Project as well as the PRGT Pipeline,” the plaintiffs said in court documents, filed March 13.

Although the government-owned electrical utility, B.C. Hydro, recently signed a deal to supply clean energy to the projects, Mercer and Nyce said that isn’t a done deal, as it would rely on a major transmission line being completed.

If that doesn’t come through, the plaintiffs said the project may need to rely on gas turbines, adding another $2 billion to the capital costs and releasing 1.8 million tons of emissions per year.

The project also faces significant challenges, as Indigenous communities and environmental groups oppose the project, which the plaintiffs said could jeopardize the financial viability of the project.

At the same time, opponents say the project poses serious risks.

In their lawsuit, Mercer and Nyce note the route crosses several salmon-bearing rivers, as well as areas of cultural significance to the Nisg̱a’a Nation, including the Nass Valley lava beds.

Environmental groups have opposed PRGT and Ksi Lisims, saying they are part of an expansion of fossil fuels at a time when governments should be phasing it out in favor of green energy.

Provincial and federal governments, however, have lent support to both projects, with the federal government adding Ksi Lisims to its list of fast-tracked major projects late last year, suggesting it would be a boost to the provincial and national economy.

The PRGT pipeline project has already been subject to one lawsuit by another First Nation and two nonprofits.

The Skeena Watershed Conservation Coalition, the Kispiox Valley Community Centre Association, and the Kispiox Band council argued an environmental permit had expired before substantial work began on the project.

The British Columbia Energy Regulator, however, disagreed and let the project move ahead without needing a new environmental permit. And the British Columbia Supreme Court agreed in August last year, according to northeastern British Columbia publication Energetic City.

In 2024, some Nisg̱a’a communities voiced their own opposition to the pipeline, setting up roadblocks to stop vehicles from accessing construction sites, according to the environmental magazine The Narwhal.

Those blockades follow similar major actions against the Coastal GasLink pipeline project, which saw Wet’suwet’en hereditary chiefs and supporters block construction of that pipeline, along with solidarity protests in Vancouver and elsewhere.

Mercer and Nyce say that by partnering with Western LNG to buy the pipeline project, the Nisg̱a’a Lisims Government broke its fiduciary duties to its community members.

The claims haven’t been tested in court, and Nisg̱a’a Lisims Government, Western LNG and TC Energy haven’t responded for a request for comment.

Courthouse News reporter Dustin Godfrey is based in Vancouver, Canada.