LNG

Woodfibre LNG has completed critical tunnelling works on its Eagle Mountain–Woodfibre feedgas pipeline, paving the way for pipe installation and commissioning ahead of the project's targeted first LNG cargo in December 2027.

Midstream operators in the US have announced fresh investment in gas storage capacity to provide flexibility as the LNG build-out progresses into 2026. Enbrige just took FID on new storage facilities in Texas and Louisiana while Energy Transfer started to build a cavern storage at Bethel.

Woodfibre LNG, a joint venture of Pacific Energy and Enbridge, is going full steam on Canada’s first net-zero liquefaction terminal. First pipe rack modules arrived at the site near Squamish, BC.

Enbridge Inc, the Canadian-based pipelines and energy company, swung to a fourth-quarter profit from a previous loss and more than doubled annual profits as pipeline natural gas and liquids distributions increased amid the purchase of a gas utilities portfolio.

Pembina Pipeline Corp., the leading Canadian energy pipeline and midstream company with a network of gas gathering, processing and energy export terminals in North America and a stake the planned Cedar LNG project in British Columbia, has agreed to issue $1.8 billion of senior unsecured medium-term notes.

UK major BP has entered its third long-term liquefied natural gas offtake contract from the Woodfibre LNG project in the Canadian Pacific Coast province of British Columbia.

“With the additional contract to offtake 450,000 tonnes of LNG per year for 15 years on a free on-board (FOB) basis, all of the LNG production from the Woodfibre LNG export facility is now committed for sale to BP,” said the London-based company.

Woodfibre LNG is a Canadian subsidiary of the Asian group, Pacific Energy Corp. Its main offices are in Singapore and with others in Jakarta, Beijing and Hong Kong.

The latest deal takes BP’s offtake total to 1.95 million tonnes per annum and the remainder on a flexible offtake basis from the plant being built near the town of Squamish in BC.

The North American pipelines and energy company Enbridge is investing to own 30 percent of the C$5.1-billion (US$3.75Bln) Woodfibre project scheduled to enter service in 2027.

Enbridge and Pacific Energy announced that deal in July 2022. Woodfibre LNG will produce a total of 2.1 MTPA of LNG and will have 250,000 cubic metres of storage capacity.

Engineering

The project is now fully underpinned by the long-term offtake agreements with BP. Woodfibre LNG has engaged global engineering and construction company McDermott International to constructed the Woodfibre facilities.

After the latest Woodfibre deal, BP said it continued to look for opportunities across the gas value chain as it sees LNG as an essential part of the energy transition and its own pivot to becoming an integrated energy company.

“As BP works towards building an LNG portfolio of 30 million tonnes by 2030, the additional Canadian west coast supply source expands BP’s flexible, high-quality LNG portfolio and further enhances the company’s capability to meet the growing global natural gas demand,” BP explained.

In addition to securing LNG offtake rights from the project, BP added that it would provide “safe and reliable transportation of gas” to the Woodfibre LNG export facility during the 15-year contact term.

“As the world seeks secure, affordable and lower carbon energy, global demand for LNG is expected to continue to grow and this additional Canadian supply source will further enhance bp’s supply positions in the Pacific region,” said Jonathan Shepard, Vice President for Global LNG Trading and Origination at BP.

“We look forward to continuing our close collaboration with Woodfibre LNG,” stated Shepard.

The British Columbia Oil and Gas Commission has just highlighted the massive volumes of shale gas reserves to underpin LNG export projects in the Canadian province with the Montney Shale alone having 1,965 trillion cubic feet of gas-in-place unconventional resources.

The LNG Canada project led by Royal Dutch Shell will initially produce 14 million tonnes per annum of LNG and has an option to increase its capacity to 28 MTPA.

The Shell project includes a US$5-billion pipeline of 670 kilometres being developed by TransCanada Corp. to bring the feed-gas from the Montney in northeast BC to the Pacific Coast.

Feed-gas for Chevron’s Kitimat plant will come from the large upstream shale-gas resources in the 322,000 net acres it has in the Horn River and Liard Basins, also in northeast BC.

Chevron will then transport the gas on the proposed Pacific Trail Pipeline to the liquefaction plant site at Bish Cove, also near Kitimat.

While the BC Commission put the Montney Shale resources in place at around 1,965 Tcf, for the project being developed by Chevron in partnership with Woodside of Australia will use some of the Liard Shale’s 848 Tcf and the Horn River Shale’s 448 Tcf.

The northern natural gas basins account for nine of 10 new wells in the province and currently account for 4.9 billion cubic feet per day, or 77 percent, of BC's output.

“The 42 Tcf of Montney gas booked as market-ready reserves since horizontal drilling and hydraulic fracturing arrived to enable development in 2005 are only 2 percent of the resources, “ said the Commission in its 40-page report.

In the last five years natural gas production has increased by 23 percent resulting in increased loads within the existing pipeline delivery points for the Montney, Horn River and Liard basins.

Most of the gas within these regions is transported by pipelines by Enbridge and TransCanada.

“In 2005, the onset of Montney horizontal drilling with hydraulic stimulation created a new supply of gas. This was followed by Horn River development in 2010. Further development of the Horn River basin has now ceased, awaiting economic gas demand,” stated the Commission.

Chevron has recently revived its almost dormant LNG project originally proposed with Apache Corp. for Bish Cove near Kitimat by applying to regulators for export capacity of up to 18 MTPA.

The prolific Montney formation covers 130,000 square kilometres at various depths of BC and the neighbouring province of Alberta.

The provinces split the geology evenly by area, but BC has about 60 percent of the gas estimated to figure in the Montney marketable reserve forecast, or 271 Tcf of the formation’s total 449 Tcf of marketable gas.

The Commission listed the leading BC Montney shale developers and they include participants in the LNG Canada project, Shell and Petronas of Malaysia.

Other asset holders are Encana Corp., ARC Resources, Tourmaline Oil, Painted Pony Energy, Murphy Oil Corp., Canadian Natural Resources Ltd., Canbriam Energy and Crew Energy.

Shell and its Asian partners, also including PetroChina, Japan's Mitsubishi and Korea Gas Corp. have started work at the brownfield site near Kitimat, a former energy products terminal acquired by Shell in 2011 when the delayed Chevron project had already cleared its Bish Cove site to be ready for construction.

Construction of a final subsea section of a natural gas pipeline that goes under the US-Mexico border in the Gulf of Mexico has begun and when completed will enable more pipeline gas to be transported to the current largest recipient of US LNG cargoes.

Canada will import more shale gas from the US by the eastern route, potentially straight to the federal capital Ottawa, from where Prime Minister Justin Trudeau has led the regulatory onslaught against the hydrocarbon industry.

The US government has issued a presidential permit and granted authorization for the construction of the Valley Crossing Pipeline with capacity of 2.6 billion cubic feet per day on the Texas-Mexico border that will reduce Mexican LNG requirements.