Seven Generations Energy Ltd. (7G) has entered into a development agreement with Vancouver's Steelhead LNG to explore infrastructure development and open new overseas markets for Canadian natural gas. 7G has also acquired a minority ownership interest in Steelhead LNG. This investment was funded using capital that has been designated to support 7G's market access initiatives, which constitutes less than 5% of 7G's 2016 capital budget.
"Over the past few years, we have described the grossly over supplied natural gas markets for Canadian producers and the need to seek out and develop new markets and innovative partnerships, where we can capture premium value for our large liquids rich natural gas resources. Our development agreement with Steelhead LNG marks a preliminary step among a number of market expansion opportunities that we are looking to develop. It represents an important export initiative that envisions our two companies, plus other Canadian midstream developers, service companies, capital providers, First Nations and communities, coming together to deliver globally competitive, low cost LNG and liquefied petroleum gas (LPG) into Pacific markets," said Pat Carlson, 7G's Chief Executive Officer.
Market development through stakeholder service
"This export market development initiative marks the start of a feasibility study to determine how we can achieve long term and sustainable success through the service of all of our seven stakeholders - those who care about the environment, governments and regulators, communities, business partners and infrastructure customers, suppliers and service providers, employees and shareholders and capital providers," said Carlson, who has joined the board of directors of Steelhead LNG.
"In keeping with our Code of Conduct, we need community members' insight, wisdom and advice during project planning. We need communities' help in finding ways to build projects, such as this Steelhead LNG development and potentially other export projects, that benefit all stakeholders. We have initiated some preliminary engagement with First Nations and community leaders. As with our core Kakwa River Project near Grande Prairie, Alberta, we will add this initiative to our ongoing process of gathering guidance to better understand stakeholder interests so that they are incorporated into this initiative," said Susan Targett, 7G's Senior Vice President.
Incremental and beneficial market diversification
"This agreement with Steelhead LNG is not exclusive. We are in discussions with a variety of LNG export proponents and other potential industrial, commercial and residential consumers. We believe they will generate a basket of market expansion opportunities. Each market expansion initiative represents a manageable step towards growing and diversifying markets. We believe that a series of small projects, developed in increments and in service of stakeholders along the development path, will best serve British Columbians, Albertans, Canadians, and all stakeholders," said Marty Proctor, 7G's President and Chief Operating Officer.
Market developments require collaborative efforts of multiple contributors
Market integration that processes and transports liquids-rich natural gas and its products for Asian consumers requires midstream infrastructure, multiple natural gas sources and participant companies to finance the investment. It requires a collective effort to achieve economies of scale and manage the risk that would otherwise be associated with a larger, one resource supplier, one owner project. Beyond this Steelhead LNG initiative, 7G is evaluating several other market integration initiatives that include natural gas combined-cycle electric power generation, petrochemicals derived from either of natural gas or natural gas liquids and other LNG and LPG exports opportunities. Among these opportunities, 7G believes that the largest new market potential could arise from an array of LNG export projects.
Cleaner burning Canadian natural gas to accelerate transition to lower carbon economy
Steelhead LNG and 7G believe that helping countries shift away from greenhouse gas (GHG) intensive energy sources, such as low quality coal, will reduce global GHG emissions, which impact the whole world. This is a global priority. Already a leader in producing low cost natural gas, 7G is investigating how it can export natural gas that has among the lowest carbon intensity of fossil fuels. Canada is well positioned to meaningfully contribute to this objective, affirming its role as a leading global citizen. Steelhead LNG and 7G are positioning to provide low cost delivery of cleaner burning natural gas produced in a responsible manner.
Adapted from press release by Francesca Brindle
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/20092016/seven-generations-7g-enters-development-agreement-with-steelhead-lng-acquiring-minority-ownership-4115/