Trudeau Government Sued $20 Billion for Tanking LNG Projects

The companies behind GNL Québec and Gazoduq are suing the Trudeau government for $20 billion in compensation for canceling their LNG terminal and pipeline projects in Saguenay, Que, Canada.

The $14 billion project aimed to construct a terminal on the Saguenay River to export liquefied natural gas imported by pipeline from Western Canada. It would also have resulted in a 780-kilometer pipeline connecting the port of Saguenay to north-eastern Ontario.

On Thursday, the American firm Ruby River Capital LLC filed a request for arbitration against the government with the World Bank Group’s International Center for Settlement of Investment Disputes (ICSID).

The rejection by Ottawa could be the final nail in the coffin for the Quebec LNG plant.

Ruby River Capital cited the North American Free Trade Agreement (NAFTA) and the Canada-United States-Mexico Agreement (CUSMA) in its claim. NAFTA served to lower or eliminate tariffs on imports and exports between the three participating countries, thereby increasing trade.

Freestone and Breyer Capital, both of which are affiliated with Jim Illich, own the company. Illich is the founder and current chairman of Breyer Capital, as well as the founder and CEO of Freestone. GNL Québec, which will be renamed Symbio Infrastructure in 2021, is backed by Freestone and Breyer Capital. Ottawa and Quebec both rejected the proposal.

The Quebec government initially rejected the Énergie Saguenay terminal in 2021, following a critical report by the province’s environmental review agency, the Bureau d’audiences publiques sur l’environnement (BAPE).

LNG Projects increased greenhouse gas emissions

Canada’s Ministry of Environment and Climate Change rejected the LNG terminal project in February 2022. Minister Steven Guilbeault stated that he decided based on the findings of an environmental assessment report prepared by the Canadian Impact Assessment Agency (IAEC).

The project would have increased greenhouse gas emissions and harmed the cultural heritage of Innu First Nations and marine animals such as St. Lawrence beluga whales, according to the IAEC.

Despite the report, Énergie Saguenay maintained that the project would have reduced greenhouse gas emissions by replacing fuels such as coal and that the liquefaction plant would have been powered by hydroelectricity.

Symbio Infrastructure announced in June 2022 that it had agreed with the Ukrainian state company Naftogaz to supply liquified natural gas and hydrogen to Ukraine, which was already at war.

In September, Illich met with Guilbeault and François-Philippe Champagne, the minister of innovation, science, and industry.

Despite the rejection of the proposed terminal, the Canadian government is still conducting an environmental assessment of the pipeline.

Investment Arbitration Reporter, a news and analysis service that tracks international arbitrations between foreign investors and sovereign governments, broke the story first. According to the complaint, Ottawa decided based on politics, contrary to the spirit of free trade agreements.