Steelhead LNG joins Canada natural gas export race

Tue Jul 8, 2014 2:23pm EDT
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By Julie Gordon

VANCOUVER (Reuters) - A closely held Canadian company has waded into British Columbia's crowded liquefied natural gas (LNG) export fray with a plan to build a $30 billion terminal on Vancouver Island.

Steelhead LNG said on Tuesday it had applied to Canadian regulators for permission to export up to 30 million tonnes of LNG a year for 25 years, joining a list of fourteen companies vying to build projects in the Pacific Coast province.

The National Energy Board has already approved export licenses for nine projects in British Columbia. With Steelhead, it has five more under review, as global and domestic companies scramble to build the facilities needed to ship cheap Canadian gas to energy-hungry Asian markets.

"It is a competitive market. If you look at where we are, we're certainly not the first to arrive," said Steelhead Chief Executive Officer Nigel Kuzemko. "But we're an independent, Canadian business, and as such we don't have any of the hang-ups some of the super majors might have."

Many of the front-runners in the race to develop Canada's LNG industry are majors like Royal Dutch Shell Plc (RDSa.L: Quote) and Chevron Corp (CVX.N: Quote), who are concurrently developing rival projects in other parts of the world.

Steelhead, which is focused on one project, is backed by KERN Partners, a Calgary-based private equity firm with C$1.1 billion ($1.03 billion) under management that looks for long-term investment opportunities in Canada's energy sector.

Steelhead's export terminal, which would be designed to produce 24 million tonnes of LNG a year, would be built in Anacla, a remote village about 200 kms (125 miles) northwest of Victoria on Vancouver Island.

Steelhead is working closely with the local Aboriginal community to develop the project, which will also require the construction of a lengthy pipeline to carry the gas from fields in northern British Columbia and Alberta.   Continued...