The federal government has conditionally approved the Pacific NorthWest liquefied natural gas project in British Columbia with 190 legally binding conditions.

Environment Minister Catherine McKenna said the approval decision was taken following extensive studies on the project's environmental impact, science and after consultations with First Nations.

Flanked by Natural Resources Minister Jim Carr, B.C. Premier Christy Clark and Fisheries Minister Dominic LeBlanc, McKenna said the investment was worth $11 billion and would be one of Canada's largest resource development projects.

"I am confident with the 190 legally binding, and scientifically determined conditions, that we will address the most important environmental impacts to ensure this project proceeds in the most sustainable manner possible," McKenna said.

Those 190 conditions cover everything from wetland management, the quality of freshwater fish and fish habitat, marine fish and mammals, migratory birds, human health, concerns over cultural heritage sites and long-term environmental monitoring.

The liquefied natural gas project on B.C.'s coast has been championed by Clark as the largest private-sector development in the country's history.

It has also rankled environmentalists and some First Nations who are concerned about greenhouse gas emissions and the potential impact on local fisheries and habitat.

McKenna said the decision was based not only on science but also on consultations with First Nations from the area that advised the government on fishing and other environmental concerns.

The proposed pipeline would bring natural gas to a terminal on Lelu Island, south of Prince Rupert, located at the mouth of the Skeena River, which is B.C.'s second largest salmon-bearing river. (Canadian Press)

"Indigenous Peoples were meaningfully consulted, and where appropriate, impacts on their rights and interests were accommodated," McKenna said. "Consultations were extensive and project conditions will address concerns that were raised."

McKenna said that Indigenous groups near the site of the project will work with the federal government on environmental monitoring, which the minister said was consistent with the government's reconciliation agenda.

Greenhouse gas emissions

The project, backed by Malaysian-owned energy giant Petronas, would move natural gas from B.C.'s northeast via a TransCanada pipeline to a terminal on Lelu Island near Prince Rupert for export to Asia.

The Canadian Environmental Assessment Agency (CEAA) released a draft report in February that said the project would result in roughly 6.5 to 8.7 megatonnes of GHG pollution each year, a marked increase in emissions both at the provincial (8.5 per cent) and national (0.75 per cent) level.

The agency has said the project "would be one of the largest greenhouse gas emitters in Canada."

Since that draft report, the agency has revised its estimate down closer to the 5.0 megatonne level, or about the equivalent of one million new cars on Canadian roads each year.

The decision comes as the global natural gas market continues to be weighed down by a glut from new projects in the U.S. and Australia, pushing prices to new lows.

Petronas initially said it would proceed with the project if the federal government gave its approval, but now the company says it will conduct a "total review" of the project before making a final investment decision.

In a statement, Adnan Zainal Abidin, president of Pacific NorthWest LNG, welcomed the announcement, saying it was a significant milestone, but he stopped short of saying what would happen next.

"Moving forward, Pacific NorthWest LNG and our shareholders will conduct a total project review over the coming months prior to announcing next steps for the project," he said.

A job creator or broken promise?

"This is an important part of a new industry for British Columbia and for Canada and with it comes new opportunities and new economic benefits," Carr said.

The natural resources minister said the project represents one of Canada's largest resource developments, with a total capital investment of up to $36 billion when related upstream natural gas developments are included, he said.

Federal opposition parties had a mixed response to the announcement.

"Let me be clear: The prime minister had no other decision that he could have taken," interim Conservative Leader Rona Ambrose told reporters earlier Tuesday, before the announcement was even confirmed.

"It's a project that is absolutely necessary for the prosperity of this country, so now that he's approved it, the next step is to get it built, so we expect him to be a full champion behind this project."

NDP MP Nathan Cullen, however, said the approval "breaks the prime minister's solemn promise to First Nations for a new relationship of respect and proper consultation."

"The decision was made based on Stephen Harper's discredited review process and without regard to the threats to our wild salmon economy or to Canada's climate commitments," Cullen added.

Local reaction mixed

In northeast B.C., where the pipeline will originate, there was relief from many residents who have been waiting years for a major LNG project to be fully approved.

"I feel that a lot of people I talk to here already are hearing this yes there's an industry … which gives people some optimism on where they're gonna go with their life," says Kristy Leer, who has lived in the town of Fort Nelson all her life, and organized a #YesToLNG rally earlier this year.

As natural gas prices have plunged, many jobs connected to the industry in the Peace Region have become less stable.

"It's something that people can kind of see a light at the end of the tunnel," said David McDougall, who works at an industrial supply shop in Fort St John, and started a petition asking Ottawa to support LNG.

"With the price dropping out in the market … it's cyclical, it will come back at some point."

But in northwestern B.C., where the pipeline will end — and the tankers will dock — reaction tended to be muted or negative, as First Nations groups worry what impacts the project would have on their habitat and fishing.

"The people depend on the fish, the people depend on the halibut, the crab, that's basically our fridge there," said Ken Lawson, a fisherman and house leader of the Lax Kw'alaams First Nations, which lays claim to Lelu Island.

"I know there's gonna be all kinds of legal battles, so you know, it'll be tied up in the courts for sure."

Donald Wesley, a hereditary chief with the Gitwilgyoots tribe, was in Ottawa when the announcement was made.

"I think Mr. Trudeau made the biggest mistake of his career ... he's not as straightforward of a guy as everyone perceived him to be," he said, vowing also to pursue legal action.

"We're trying to protect something here that belongs to the people of Canada."