Steelhead LNG Drops One BC Project, Moves Ahead on Another

Vancouver-based Steelhead LNG and the Malahat First Nation said December 1 they are no longer exploring the proposed Malahat LNG project, a floating 6mn tons/year liquefaction facility on the east coast of Vancouver Island.

Steelhead said it made the decision “after careful consideration and based on several factors” as it examined ways to develop a project that delivers low-cost LNG “and is globally competitive.”

The Malahat project was awarded a 25-year export licence by Canadian regulatory National Energy Board in the fall of 2015.

While Malahat has been removed from Steelhead’s portfolio, the company is continuing to explore development of its larger Sarita project, which was renamed Kwispaa on November 30 to reflect the participation of the Huu-ay-aht First Nation as a partner.

Kwispaa is proposed for a site on Sarita Bay on the west coast of Vancouver Island, and at full build-out would comprise 24mn t/y of jetty-moored liquefaction capacity. The first phase, rated at 12mn t/y, carries a capital cost of $10bn.

“Kwispaa LNG is the only Canadian LNG project being developed through a co-management relationship between industry and First Nations,” a Steelhead LNG spokesman told NGW in an e-mail.

Supply arrangements are in place with Calgary-based producer Seven Generations Energy, while a pipeline solution is being studied that would extend 1,000 kilometres from Station 2 on Spectra Energy’s Westcoast Transmission System near Chetwynd, British Columbia to the Kwispaa site, crossing the Strait of Georgia to Vancouver Island.

Pre-FEED (front end engineering and design) has been completed, and a project description is expected to be filed with regulators in the first quarter next year. FEED would start in 2Q 2018, with a final investment decision (FID) targeted for the end of 2019. Subject to that FID target being met, first LNG would be produced by the end of 2024.