Steelhead LNG advances plans

One of the latest entries into the crowded field of starters to develop LNG in British Columbia is starting to show greater staying power than most.

In its latest advance, Steelhead LNG has signed an agreement with Western Canadian natural gas producer Seven Generations Energy, 7G, to become a leading source of feedstock gas for two proposed projects on Vancouver Island.

British Columbia’s Natural Gas Development Minister Rich Coleman said the partnership, which gives 7G a minority interest in the private equity-based company for an estimated C$55 million, leaves the province “exceptionally positioned” to become a leading supplier of LNG to Asian markets.

7G Chief Executive Officer Pat Carlson said his company believes “scalable projects” such as those proposed by Steelhead and that provide a role for First Nations from the outset can deliver strong benefits to all affected communities.

Steelhead Chief Executive Officer Nigel Kuzemko conceded the current market is challenging for LNG development, “but our projects remain very promising opportunities,” with the 7G pact representing a “positive step toward realizing our sustainable and economic delivery model for LNG.”

But he acknowledged “there is more work to do and milestones to achieve for our projects to proceed.”

The deal comes a year after Steelhead teamed up with Oklahoma-based Williams Cos. to examine the feasibility of building a gas delivery pipeline from the mainland to two sites - one at Malahat at the southern end of Vancouver Island and the other near Port Alberni on the island’s west side.

That includes the possible revival of a C$340 million undersea pipeline that was shelved in 2003.

Steelhead said its design concept for the two floating terminals will need only a “limited land-based footprint at each site” and offer “scalable production capacity” leading to an “efficient decommissioning process at the end of the facility lifespan.”

The company also said it is exploring ways to access emerging LNG markets such as the conversion of international shipping vessels to LNG from bunker fuel and diesel.

Steelhead has five 25-year export licenses from the National Energy Board to ship a combined 30 million metric tons a year of LNG.

- GARY PARK