LNG

The Canadian Woodfibre LNG project being developed by the Asia-based Royal Golden Eagle (RGE) group of Indonesian businessman Sukanto Tanoto has pushed back the start of construction until the end of summer 2021.

Woodfibre President David Keane, who is retiring at the end of November but will continue to be an adviser to the project in British Columbia, said the parent company was expected to make a final investment decision by the third quarter of 2021.

“Construction would start shortly thereafter, with the plant expected to be producing liquefied natural gas for export by late 2025,” said Keane.

The outgoing President explained that the delay had been caused by several issues, not least the Covid-19 pandemic.

The project has been affected by Covid-19 temporarily closing LNG-module fabrication yards in Asia. The delay also forced the company to apply for a five-year extension to its provincial environmental certificate.

Before joining the Woodfibre project in 2018, Keane had been the Chief Executive of the industry lobbying group, the BC LNG Alliance, now called the Canadian LNG Alliance, for four years.

Woodfibre LNG is a small-scale venture with plans to export to Asia, where the parent company has offices in Singapore, Jakarta, Hong Kong, Nanjing and Beijing.

The Woodfibre plant is sited on a brownfield site of a former pulp mill, about 7 kilometre from the town of Squamish and 70km northeast of Vancouver.

It was granted a permit back in July 2019 by the provincial authorities to proceed with construction.

The plant when completed will comprise a facility with output of 2.1 million tonnes per annum and LNG and storage tanks with 250,000 cubic metres of capacity. The projected cost is around US$1.4Bln.

Woodfibre had close cooperation in the environmental assessment process with the native North American Squamish First Nation in the area of the proposed plant.

Earlier in November 2020, the BC Environmental Assessment Office also granted utility and infrastructure company FortisBC a five-year extension to its environmental certificate for a new 47-kilometre pipeline that will supply natural gas to the Woodfibre plant.

In the meantime, Woodfibre has been working on the remediation of its site so that it is ready for construction next year. 

The British Colombia Environmental Assessment Office has extended the public comment period by six days for the amended permit request proposed for the Canadian Woodfibre LNG project. The comment period will now end at midnight on December 15.

The Rudong liquefied natural gas import terminal in the eastern Jiangsu Province of China and with LNG links to Canada is undergoing repairs after an accident and is not expected to be fully operational again until mid-November.

Woodfibre LNG, the small-scale Canadian export project planned for near Squamish in British Columbia, has been granted a permit by the provincial authorities to proceed with construction.

The Asian-based developer of the Canadian Woodfibre LNG export project in British Columbia has received provincial authorization to continue clearing the brownfield site near the town of Squamish that was previously a pulp mill.

Pacific Oil & Gas, the Asian-based developer of the Canadian Woodfibre LNG export project in British Columbia, is buying Canbriam Energy, a producer of natural gas in the Montney Shale basin of northeast BC.

Pacific Oil & Gas is a subsidiary of the Royal Golden Eagle group of Indonesian businessman Sukanto Tanoto and whose headquarters are in Singapore.

The Asian and Canadian companies said the Canbriam transaction would create a well-capitalized entity able to grow from its current production of about 200 million cubic feet per day of natural gas, including 6,000 barrels per day of associated natural gas liquids.

The Woodfibre liquefaction and export plant is being built on the site of a former pulp mill at Squamish, north of Vancouver, and is licensed to export more than 2 million tonnes per annum of LNG.

The relatively small-scale Canadian LNG project is expected to start commercial operations by about 2023.

The PO&G purchase of Canbriam includes its natural gas processing plants and water-handling infrastructure to support natural gas pipeline transportation.

“Canada has the opportunity to become a leader in the global energy transition,” said Ratnesh Bedi, President of PO&G.

“Canbriam is one of the lowest cost producers in the Montney and we welcome the opportunity to work in Canada and produce some of the cleanest natural gas,” added Bedi.

Paul Myers, Canbriam’s President and Chief Executive, welcomed his company’s sale to such an experienced energy player.

“This transaction supports ongoing development of our prolific Montney assets and aligns us for future natural gas exports. We warmly welcome Pacific Oil & Gas as our new owner,” stated Myers.

The Woodfibre LNG project is one of the few moving forward on the Canadian West Coast where more than a dozen were previously planned.

Woodfibre owner PO&G also has LNG import assets in China. It holds a 35 percent stake in the Rudong LNG import terminal in China's eastern Jiangsu Province, with 55 percent held by Kunlun Energy, a Hong Kong-listed subsidiary of PetroChina.

PetroChina itself is an investor in the largest LNG export project moving forward in BC, the LNG Canada joint venture with 20 MTPA of initial output led by Royal Dutch Shell and with other stakeholders including Mitsubishi Corp. of Japan and Korea Gas Corp.

The closing of the Canbriam transaction is expected to occur before July 2019.

Macquarie Capital Markets Canada is the acting financial advisor to PO&G and Bennett Jones is acting as legal counsel.

RBC Capital Markets is the advisor to Canbriam and Norton Rose Fulbright Canada is giving legal counsel.