A year after launching a review of reviving a dormant seabed pipeline proposal, a British Columbia (BC) liquefied natural gas (LNG) terminal sponsor has enlisted an Alberta producer to cooperate on project development planning.
Calgary-based Seven Generations Energy Ltd. agreed to work with Steelhead LNG Corp. of Vancouver on issues ranging from delivering gas to the southern Pacific coast of British Columbia to making overseas sales, the companies announced today.
Seven Generations also confirmed it has accepted an undisclosed minority interest in Steelhead, an industry newcomer that is attempting to build an export enterprise from scratch. But the Calgary gas producer described the cooperation as only "preliminary," and as a "feasibility study" rather than a commitment of support.
"This agreement with Steelhead LNG is not exclusive,” Seven Generations president Marty Proctor said in a statement. “We are in discussions with a variety of LNG export proponents and other potential industrial, commercial and residential consumers."
The Calgary firm also described a strategy that departs from years of unsuccessful efforts to break into the global LNG trade with mega-scale, single-purpose schemes involving multibillion-dollar northern BC terminals and pipelines.
“Market integration that processes and transports liquids-rich natural gas and its products for Asian consumers requires midstream infrastructure, multiple natural gas sources and participant companies to finance the investment,” the company said. “It requires a collective effort to achieve economies of scale and manage the risk that would otherwise be associated with a larger, one-resource-supplier, one-owner project."
Proctor added, "We believe that a series of small projects, developed in increments and in service of stakeholders along the development path, will best serve."
Steelhead holds a long-term gas export license from the National Energy Board (NEB) to load cargos of up to five billion cubic feet per day at floating LNG terminals planned on Vancouver Island in cooperation with coastal aboriginal settlements. Steelhead and Seven Generations, which is active in the Montney shale region amid northern native communities, both emphasize community relations programs.
The deal with Seven Generations comes 12 months after Steelhead commissioned a feasibility study by the Williams group into reviving an enlarged version of the aborted Georgia Strait Crossing project. The original seabed pipeline plan won NEB approval only to be shelved due to public opposition and unfavorable economic conditions in 2004.
The new version, titled the Island Gas Connector, would hook up the Westcoast Energy supply grid in the BC interior to the proposed Steelhead LNG terminals via a westbound link across Washington state and a northbound subsea connection to Vancouver Island. Like the arrangement with Seven Generations, the deal with Williams only covered a feasibility study. No moves have been made towards construction.