Province does about-face on natural gas funding: back to the drawing board for north shore communities on LNG project.

• Author: Ross, Ian
• Position: NEWS

Despite being blindsided by a provincial funding program change, Terrace Bay Mayor Jody Davis still believes there is hope to bring liquefied natural gas (LNG) to Lake Superior's North Shore.

Davis said he's been assured by Ontario cabinet ministers Michael Gravelle and Bob Chiarelli that their $100-million regional affordable energy project stands a bettter chance of securing funding to make the project a reality.

At the recent Rural Ontario Municipal Association conference in Toronto, the province announced that it was changing and repackaging a combined $200-million loan and $30-million grant program to expand natural gas networks in Ontario to an entirely $100-million grant program.

"They both feel that the grant program keeps us in the top five (projects) for moving ahead," said Davis, who met with Gravelle, the local MPP and northern development and mines minister, and Infrastructure Minister Chiarelli on the afternoon of Jan. 30 to hear their explanation.

"They think this is a better option for our communities to succeed in getting the grants to make this move forward. We want to work with them to make this happen."

Additionally, Davis said a top Ministry of Finance advisor told him their LNG application likely wouldn't have been accepted under the previous program.

"According to Finance, the amount of equity we would have to have to get the loans wasn't there. We probably wouldn't qualify. They felt much better if we were successfully in the large grant program in getting approved."

For more than two years, the communities of Terrace Bay, Schreiber, Marathon, Manitouwadge and Wawa have partnered with Northeast Midstream, a southern Ontario energy developer, to study the economics behind tapping into the natural gas pipeline at Nipigon, freezing the gas and then trucking it to distribution centres in each of the towns.

The rugged topography of the North Shore makes it too expensive to extend a natural gas pipeline into these communities.

Area mayors and administrators had been anxiously waiting for months for the province to announce the opening date for project submissions under the previous program. Instead, they got found out some changes were in store.

In an email, Katrina Kim, a press secretary in Chiarelli's office, concurred that the draft proposal put forward by Northeast Midstream was "not viable under the loan program. We look for ward to working with them to see how they might be able to take advantage of the expanded...