LNG

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.

Woodfibre LNG, the mid-scale project near the town of Squamish in British Columbia, has issued a notice to proceed to US energy engineering contractor McDermott International.

Woodfibre LNG, the mid-scale project near the town of Squamish in British Columbia, has started hiring workers for wide range of posts as the projects development gathers pace.

The Canadian Woodfibre LNG project, a mid-scale venture being developed by the Asia-based company Pacific Oil and Gas Ltd, a subsidiary of Royal Golden Eagle (RGE) group, has signed a second supply agreement with UK major BP.

The Woodfibre project said its latest Sales and Purchase Agreement (SPA) was with BP Gas Marketing for the delivery of 750,000 tonnes of LNG on a free on board (FOB) basis over 15 years.

This SPA will increase BP’s total LNG off-take to 1.5 million tonnes per annum, over 70 percent of Woodfibre LNG’s future annual production.

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 in the province of British Columbia.

It was granted a construction permit back in July 2019 by the provincial authorities to proceed with building, though the developers have so far declined to take a final investment decision.

The plant when completed will comprise a facility with output of around 2.1 MTPA of LNG and storage tanks with 250,000 cubic metres of capacity.

“Forward-looking companies like BP are turning to projects like ours for sustainable, stable gas that will supply a clean energy mix,” said Ratnesh Bedi, Pacific Oil & Gas President.

“We look forward to working with BP to deliver Canadian natural gas from one of the lowest carbon-footprint LNG facilities in the world,” added Bedi.

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

In late 2020, the BC Environmental Assessment Office also granted local 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 facility.

In the meantime, Woodfibre has been working on the remediation of its site

Woodfibre has said it could make an investment decision this year to put the project on track to start commercial operations in 2025.

The only other LNG export project moving forward in Canada is also in British Columbia, the LNG Canada project led by Royal Dutch Shell and with mainly Asian joint investors.

Shell’s partners in the plant currently under construction near the town of Kitimat are PetroChina, Mitsubishi Corp. of Japan, Petronas of Malaysia and Korea Gas Corp.

However, LNG Canada is on a larger scale than Woodfibre with around 20 MTPA of output expected in the first phase of development using some of the massive untapped natural gas resources in the northeast of BC province. 

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 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.

The Canadian Woodfibre LNG project proposed for the district of Squamish in British Columbia has reached final agreement with the Squamish First Nation, giving the native people benefits of more than C$225 million (US$170M) in cash over the planned 40 years of operations.

Canadian Woodfibre LNG President David Keane said the small-scale liquefaction and export venture proposed for the district of Squamish in British Columbia was expected to move to the construction phase in the first quarter of 2019.

Woodfibre LNG, the Canadian export venture planned for the district of Squamish in British Columbia and owned by a Singapore-based company, has signed a preliminary supply deal with a subsidiary of the largest Chinese LNG importer, China National Offshore Oil Corp.