Steelhead Halts Kwispaa LNG Work (UPDATE)
The CEO of Steelhead LNG said February 18 the company's decision to stop work on its 12mn metric tons/year Kwispaa LNG project on BC's Vancouver Island was driven largely by regulatory and political issues encountered in Canada.
Nigel Kuzemko told NGW that current "political, regulatory and geopolitical conditions" – primarily with respect to routing a pipeline that would bring natural gas from northeast BC to the project on Vancouver Island's west coast – led Steelhead to pause the project for the time being. Steelhead and its co-manager, the Huu-ay-aht First Nation, were expected to take a final investment decision on the project next year, but that has now been postponed indefinitely, Kuzemko said.
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"We will take some time to work with First Nations and governments to see if there isn't some way of developing a partnership that can successfully move the pipeline forward," Kuzemko said. "We still think the LNG project is a fantastic opportunity."
In the global energy community, Kuzemko said, questions are "starting to stack up" over the ability of major projects in Canada to get built, given regulatory, environmental and First Nations issues.
Coastal GasLink (CGL), the pipeline being built to supply the Shell-led LNG Canada project in Kitimat, on BC's northern coast, is experiencing problems with pre-construction work on its right-of-way in the face of objections by hereditary leaders of the Wet'suwet'en First Nation. Elected leaders of the Wet'suwet'en – and 19 other First Nations – have approved the CGL project and signed benefits agreements with it.
Ellis Ross, former chief councillor of Haisla Nation and now Liberal MLA for Skeena, says he's not surprised by Steelhead's decision, given strict emissions caps in the CleanBC program and new regulatory rules for major projects.
"When a province introduces more red tape and taxes, business is the first to leave town for more welcome jurisdictions," he told NGW February 19.
Huu-ay-Aht First Nation told its citizens about the Kwispaa stoppage in an open letter posted to its website on February 15 over the signatures of elected chief councillor Robert Dennis and head hereditary chief Derek Peters.
“We are deeply disappointed, and over the coming weeks your government will evaluate the implications of this decision by Steelhead LNG, identify all go-forward options and assess how to best advance the interests of our citizens,” the letter said.