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Steelhead and Seven Generations sign agreement to explore midstream infrastructure

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Steelhead LNG has announced that it has signed a new development agreement with Seven Generations Ltd. Steelhead claims that this agreement sets the stage for engaging Aboriginal groups as both companies explore the development of new midstream infrastructure to support Steelhead’s proposed liquefaction and export projects on Vancouver Island, Canada. Through the arrangement, Seven Generations has acquired a minority interest in Steelhead LNG. The arrangement is also expected to provide potential new markets for Seven Generations’ production, as well as increased certainty of the supply of natural gas for Steelhead LNG.

Nigel Kuzemko, the CEO of Steelhead LNG, said: “This arrangement with Seven Generations creates an opportunity, in the current price environment, for a LNG solution from well-head to customer that’s uniquely led by Canadian companies.

“Our shared focus on engaging early and often with Aboriginal groups and communities, combined with our collective commitment to produce and deliver low cost, low emissions Canadian natural gas, positions each company to succeed in expanding Canada’s exports of clean-burning natural gas to Asian markets.”

Rich Coleman, BC Minister of Natural Gas Development, added: “This partnership formed by Steelhead LNG and Seven Generations Energy is an example of Canadian companies working together in innovative ways to deliver Western Canadian natural gas to market, which benefits not only British Columbians and Albertans, but all Canadians.

“Their commitment to work with First Nations and communities in a collaborative manner, while at the same time support British Columbia’s role as a leader in progressing global climate change objectives, will contribute to the success of these projects. While LNG markets are challenging at the moment, with projects like these and others under development, British Columbia will be exceptionally well-positioned to become a leading supplier of LNG to Asian markets in the coming years.”

Pat Carlson, the CEO of Seven Generations, said: “This export market development initiative aims to achieve long-term and sustainable success through the meaningful engagement of those who care about the environment, governments and regulators, communities, business partners and infrastructure customers, suppliers and service providers, employees and shareholders and capital providers.

“We believe scalable projects like those being proposed by Steelhead LNG, that engage First Nations and communities from the beginning and place a high priority on our environment and safety, will deliver strong benefits to local communities, British Columbians, Albertans and Canadians. Steelhead LNG’s approach aligns with our code of conduct, which puts a fundamental emphasis on working collaboratively with communities by incorporating local insight, wisdom and advice during project planning.”

Kuzemko added: “Our proposed projects remain very promising opportunities. This agreement with Seven Generations is a positive step toward realising our sustainable and economic delivery model for LNG. At the same time the economic circumstances are challenging and there is more work to do and milestones to achieve for our projects to succeed.”

Steelhead LNG added that it is continuing to refine its At-Shore LNG (ASLNG) concept design, which utilises floating LNG production and storage units moored to marine jetties. The company claims that the concept will help contribute towards the low impact and low cost development of its proposed Malahat LNG and Sarita LNG projects. The ASLNG concept only requires a limited land footprint at each site, reducing potential local impacts and potentially allowing for remediation of existing brownfield land.

A single ASLNG production and storage unit can be designed and replicated, providing scalable production capacity at the company’s proposed facilities and an efficient decommissioning process at the end of the facility lifespan. The company has been granted five licenses by the National Energy Board to export in the aggregate of up to 30 million tpy of LNG for a 25-year period.

Steelhead LNG claims that it is also continuing to refine how the ASLNG and Malahat LNG concept design tie together. It is also continuing to conduct environmental studies for the proposed project, which is located on the Bamberton Industrial Lands just south of Mill Bay. Kuzemko commented: “Once we have furthered our concept design, incorporating feedback that we have received from Aboriginal groups and the community, we’ll be in a position to progress in the regulatory processes. In the meantime, we will continue consulting with potentially affected Aboriginal groups, local communities and the public.”

Steelhead is also continuing talks with the Huu-ay-aht First Nations to develop another ASLNG export plant at Sarita Bay, located in south of the Alberni Inlet. The project is currently in the preliminary engineering and conceptual design stage. In November 2014, Huu-ay-aht Aboriginal groups’ citizens voted in favour of continuing to explore the proposed project with the company.

Edited from press release by David Rowlands

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