The proposed Ksi Lisims LNG project in British Columbia has resolved an imminent legal threat after signing benefits agreements with the two First Nations that were challenging its federal approval.

An industry source tells iPolitics Metlakatla First Nation and the Lax Kw’alaams Band agreed to drop the judicial review they launched last fall, in exchange for potential business opportunities linked to the proposed project. 

iPolitics is not naming them so they could speak freely.

In a statement, Metlakatla First Nation says its agreement includes support for climate initiatives and sets out business opportunities that support economic independence. 

As for the Lax Kw’alaams Band, its agreement with Ksi Lisims builds on “its existing business capacity and interests,” according to their statement. 

Both communities have also amended their benefit agreements for the Prince Rupert Gas Transmission project, a pipeline that will feed the proposed LNG facility and marine terminal on Pearse Island.

This was done to better “reflect developments since the agreement was first signed in 2015,” reads a statement from Metlakatla First Nation. 

The deals mark a major turning point for Ksi Lisims, a project that is still awaiting the final trigger for construction. The project’s backers, Houston-based Western LNG, Rockies LNG, and the Nisga’a First Nation, are expected to make a final decision by the end of the year. 

In court documents filed last fall, Metlakatla First Nation cast doubt on the economics of the project, saying the government had ignored “mounting evidence” against its feasibility and pointing out the project had no “dedicated buyer.” 

In late May, Ksi Lisims reached a supply deal with German utility giant SEFE, who agreed to purchase one million tonnes of LNG annually from Ksi Lisims for up to twenty years. 

With the SEFE deal alongside previous 20-year offtake agreements with Shell and TotalEnergies, five of Ksi Lisims’ 12 million tonnes of annual LNG capacity are now spoken for.

READ MORE: Most German-bought Ksi Lisims LNG bound for global swaps, not Europe

As iPolitics previously reported, most of the cargo is destined to be swapped on global markets instead of being shipped directly to Europe.

On Monday, Uniper, another German utility, said it was actively exploring a potential supply deal with Ksi Lisims.

Other major proposed LNG projects, like the nearby $45B Glenfarne Alaska LNG project, are looking to have 80 per cent of the plant’s targeted annual capacity secured under supply deals before making a final investment decision.