British Columbia

Steelhead LNG cancels plans for floating terminal

Steelhead LNG has cancelled exploratory work on a proposal to develop a liquefied natural gas facility on the Malahat Nation's Bamberton lands near Victoria.

200 jobs, 30 years of revenue were estimated from proposed export facility outside Victoria

The Malahat First Nation is located near the town of Mill Bay, B.C., about 40 kilometres north of Victoria. (Google Maps)

Steelhead LNG  is no longer exploring a proposal for a liquefied natural gas terminal on south Vancouver Island.

The company announced plans in August 2015 to build a floating facility moored to shore with capacity to process up to six million tonnes of LNG per year.

The proposal was in partnership with the Malahat Nation, which owns the Bamberton industrial site about 40 kilometres north of Victoria, .

"Steelhead LNG made the decision after careful consideration and based on several factors, as we look to develop a project that delivers low-cost LNG that is globally competitive," a statement from the company said Friday.

 A vocal critic of the proposal, Adam Olsen, the B.C. Green Party MLA for Saanich North and the Islands, said he was always sceptical about its chances of success.

"I was excited by the news that we're not going to have this level of industrial activity in the Saanich Inlet," Olsen told On the Island host Gregor Craigie.

Olsen said community opposition to the proposed LNG plant included pollution concerns and the opposition to running loaded tanker ships past residential neighbourhood on the Saanich peninsula.

Underwater gas pipeline 'problematic'

However, he said, a particular challenge for the Steelhead-Malahat Nation proposal was getting an underwater natural gas pipeline to the Saanich Inlet terminal site, from Cherry Point in Washington State through the Gulf Islands and an environmentally protected area.

"I think the economics of building that pipeline probably were problematic," Olsen said.

He said Steelhead LNG will have a similar challenge getting a gas pipeline to its other proposed facility, called the  Kwispaa LNG project, southwest of Port Alberni on Vancouver Island.

Larger LNG proposal survives

Steelhead LNG says it will continue to explore its proposal for the larger-capacity Kwispaa LNG project, formerly called Sarita LNG. The Kwispaa project is in partnership with the Huu-ay-aht First Nation.

Meanwhile, Olsen said the prospects are better for future economic development on the Bamberton lands without the prospect of an LNG terminal on the 525-hectare site, which was purchased by the Malahat Nation in 2015 for $37.5-million.

"LNG facilities not being compatible with virtually anything else, that would have left that land not available for other opportunities," he said. 

 "Now that this LNG fiasco is over … they can start to explore then in earnest."