Steelhead LNG Corp. and the Huu-ay-aht First Nations (HFN) announced July 8 they have signed an opportunity development agreement that will see them work together to explore developing a liquefied natural gas (LNG) project on HFN-owned land at Sarita Bay, approximately 10 kilometres north of Anacla at the southern end of Alberni Inlet on Vancouver Island.
The project, which would include a land-based liquefaction facility, could ultimately represent an investment of US$30 billion and create hundreds of direct jobs from design through construction, and hundreds of additional full-time operational jobs should the project go ahead. If the project goes ahead, the facility would run for at least 25 years.
On July 8, Steelhead LNG applied to the National Energy Board for a licence to export up to 30 million tonnes of LNG per year for 25 years. The development of the Sarita Bay site would be split into four, six million tonnes per annum (mtpa) LNG production trains, which is reflected in the application.
The company announced earlier this year it planned to soon file for an export licence.
Steelhead is currently working with pipeline companies to explore infrastructure options to deliver the gas from northern British Columbia to western Vancouver Island, and options for an additional six mtpa LNG export facility along a pipeline route.
Steelhead and HFN were introduced by the Port Alberni Port Authority (PAPA), which developed strong relationships with both parties as part of its mandate to foster economic development in the region. In 2013, PAPA entered into a protocol agreement with HFN to collaborate towards achieving initiatives such as this proposed project.
The project, which is being overseen by a joint Steelhead LNG/Huu-ay-aht First Nations project development panel (PDP), represents a unique approach and an increased level of First Nations input and direction in an LNG project.
The project will be subject to several comprehensive regulatory, environmental and technical assessments and will only proceed after extensive consultation with Huu-ay-aht citizens, including a vote on a possible land lease to the project at the Huu-ay-aht First Nations People's Assembly in November 2014. PAPA would continue to be involved with the port development, marine and shipping related aspects of the project.
In order to collect ongoing input and feedback from Huu-ay-aht First Nations citizens, as well as from other stakeholders, the PDP will put in place a number of community engagement initiatives including a community office in the Bamfield/Anacla and Port Alberni areas, a project website, community rounds (meetings) for HFN citizens, community meetings and regular project updates.
These consultations will begin before, and continue after, the 2014 HFN People's Assembly.
“We look forward to working closely with Huu-ay-aht First Nations to explore LNG opportunities,” Nigel Kuzemko, Steelhead chief executive officer, said in a statement.
He said that while the site is a significant distance from upstream gas production, it does offer numerous advantages, including direct access to the Pacific Ocean.
“This agreement at the earliest stage of the project reflects our commitment to the Huu-ay-aht First Nations and our respect for their principles of iisaak (greater respect), hishuk tsa-walk (everything is connected) and uu-a-thluk (taking care of). We were also very impressed by the level of collaboration between Huu-ay-aht First Nations and the Port Alberni Port Authority. We see this kind of collaboration as an enabler for projects of this magnitude,” Kuzemko said.
"It's important to note that this agreement represents only the first step in our journey together. We recognize that between now and the time the first shipment of LNG might leave our proposed facility, thousands of decisions will have to be made and we have to get every one of them right, or that shipment doesn't leave. In addition, the decisions we make together will be measured against our joint responsibility to ensure the lands on which we hope to operate are safeguarded for generations to come."
For Huu-ay-aht First Nations chief councillor Jeff Cook, the opportunity development agreement is a reflection of HFN executive council's long-term economic development strategy that provides sustainable wealth for the Huu-ay-aht people, while respecting their value of conservation.
"We look forward to working with Steelhead LNG to explore economic development opportunities for our people," Cook said. "LNG represents a unique opportunity for our citizens, our region and the province, and this agreement will provide us with an opportunity to see how potential LNG projects might fit with the priorities and initiatives identified in our strategic plan."
The Huu-ay-aht First Nations is a 750-citizen, self-governing nation based in Barkley Sound, on the southwestern coast of Vancouver Island. Fifteen per cent of its citizens live in the community of Anacla (near Bamfield), with the remaining citizens living in Port Alberni, greater Vancouver, northwest Washington State and elsewhere.
HFN is part of the Nuu-chah-nulth Tribal Group and is a signatory to the Maa-nulth First Nations Final Agreement that came into effect on April 1, 2011.
As part of the opportunity development agreement, Steelhead LNG will provide HFN with capacity funding so the Nation can secure the technical, environmental and negotiating expertise it needs to protect its land and its interests. Steelhead LNG and Huu-ay-aht First Nations will also work together on a social benefit and community engagement program.
