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Steelhead LNG Makes Pact With Malahat First Nation

A new aboriginal supporter stepped forward in British Columbia for a jumbo liquefied natural gas (LNG) export project on Vancouver Island.

Malahat First Nation announced a benefits and lease agreement with Steelhead LNG Corp. The arrangement anticipates "direct financial benefits" and "revenue generation" for the native community but forecast amounts were not disclosed.

Steelhead filed an application 13 months ago for a long-term gas export license from the National Energy Board, which is continuing to review the proposal.

The plan calls for 45 Tcf of gas to be shipped overseas at a rate of up to 4.25 Bcf/d from five floating LNG (FLNG) vessels moored on the west coast of Vancouver Island.

The Malahat agreement provides a location for one of the FLNGs. The scheme calls for the rest of the vessels to moor at other nearby spots, also with co-operation from native communities at the locations.

Potential total investment in the program has been forecast at C$30 billion (US$23 billion). Steelhead LNG, a private Vancouver firm, has not identified funding sources, gas suppliers, or overseas customers.

The project has also not yet disclosed a plan for delivering northern BC gas about 1,000 kilometers (600 miles) to the proposed export terminals.

The only current pipeline to Vancouver Island is a modest, 24-year-old utility service with no capacity for big export flows. An industry attempt to lay a second seafloor line from the mainland to the island was scrapped in 2004 as uneconomic, following a conflict with environmentalists.

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