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A 12-storey LNG storage tank. (CHAD HIPOLITO For The Globe and Mail)
A 12-storey LNG storage tank. (CHAD HIPOLITO For The Globe and Mail)

Aboriginal group on Vancouver Island signs deal for LNG project Add to ...

A self-governing aboriginal group on Vancouver Island has signed a deal with a fledgling liquefied natural gas company in hopes of developing a massive project to export LNG to Asia.

Members of the Huu-ay-aht First Nations say they are eager to work with project leader Steelhead LNG Corp. to build an export terminal near Bamfield on the southwest side of Vancouver Island.

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Huu-ay-aht First Nations chief councillor Jeff Cook said his group is in a strong position to help nurture a major venture in the resource sector. He noted that the Supreme Court of Canada ruled last month that the consent of aboriginals is required for how their ancestral lands are used.

The Huu-ay-aht are part of the 2011 Maa-nulth First Nations Final Agreement, one of only a handful of treaty and land claim pacts in British Columbia.

“We’re open for business. For too long, we’ve been left behind in the resource industry and basically consulted after the fact. We want to be part of this LNG project,” Mr. Cook said in an interview.

Steelhead LNG is filing its export licence application Tuesday to the National Energy Board. The Vancouver-based firm is applying to export up to 30 million tonnes of LNG annually for 25 years, making it the largest project by capacity proposed so far in British Columbia.

The goal is to launch with 12 million tonnes of annual LNG capacity by 2022, and then ramp up in later years.

There are 15 B.C. LNG export projects in the works, though industry experts say it is realistic to expect four B.C. LNG projects at most to come to fruition.

Eleven of the projects are focused on terminals to be built in northwestern British Columbia. There are now two terminals proposed for Vancouver Island – the other is the Discovery LNG project slated for Campbell River. The Woodfibre LNG project is planned near Squamish, north of Vancouver, and there is also WesPac Midstream LLC’s proposal for Tilbury Island, south of Vancouver.

Nearly 650 members of the Huu-ay-aht have moved away, leaving about 100 natives remaining in the community of Anacla, near Bamfield. Other Huu-ay-aht citizens now live in various parts of British Columbia and Washington state because there have been brighter economic prospects elsewhere over the years.

Mr. Cook said the Huu-ay-aht still living in Anacla rely mostly on tourism and fishing for their livelihoods, and there needs to be a large industrial employer to lure residents. While the proposal is in the preliminary phase in exploring economic benefits, “our long-term plan is to try to get more of our people to move back home and an LNG terminal would be a good start,” he said.

Geoff Plant, who served as B.C. attorney-general from 2001 to 2005, is a board member at Steelhead LNG.

With the vast majority of British Columbia not under treaties, the presence of the Huu-ay-aht’s self-government represents an important strategic advantage in the quest to build an export terminal on native land next to Sarita Bay, said Steelhead LNG chief executive officer Nigel Kuzemko.

“It’s great for the project to work with the the Huu-ay-aht,” he said. “We certainly see some clarity because of the signed treaty and the ability to be on treaty lands. We’re tremendously excited to do this working partnership at such an early stage of the project.”

New pipelines would need to be built for transporting natural gas across the Georgia Strait to Vancouver Island. Mr. Kuzemko acknowledged that there are enormous challenges ahead, ranging from securing LNG buyers in Asia to clearing environmental assessment hurdles to lining up financing for a project that could cost $30-billion based on production of 24 million tonnes a year, excluding pipeline expenses.

Huu-ay-aht leaders are also collaborating with the Port Alberni Port Authority on potential marine developments related to shipping LNG.

So far, the National Energy Board has approved 11 LNG export applications. Nine of those projects are proposed for British Columbia while two have Oregon terminals envisaged.

While major energy companies are leading the B.C. LNG race, the nascent industry is also attracting its share of entrepreneurs, including Krishnan Suthanthiran, president of Kitsault Energy Ltd. Mr. Suthanthiran said last month at a Canadian Business Conferences’ event that he is keen to turn the former mining community of Kitsault into a thriving LNG site in northwestern British Columbia.

Follow on Twitter: @brentcjang

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