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 started hiring workers for wide range of posts as the projects development gathers pace.

Woodfibre LNG, the mid-scale project near the town of Squamish in British Columbia, has signed an engineering, procurement, fabrication and construction (EPFC) contract with Houston, Texas-based McDermott International.

McDermott said the EPFC contract was an important step in advancing detailed engineering and construction schedules in advance of Woodfibre LNG issuing a notice to proceed.

The proposed Woodfibre plant is owned by Pacific Energy Corp., a subsidiary of founder Sukanto Tanoto’s Royal Golden Eagle Group and whose main offices are in Singapore, Jakarta, Beijing and Hong Kong.

The Woodfibre project comprises a single liquefaction Train with 2,1 million tonnes per annum of LNG production and storage capacity of 250,000 cubic metres.

“Woodfibre LNG will use hydro-electricity for the main liquefaction process, and will include technology that enables liquefaction machinery to restart without flaring, a recycling system for boil-off gas, along with additional transformers, switchgear and transmission lines,” said a statement.

Woodfibre LNG already has two offtake agreements signed with UK major BP, meaning over 70 percent of Woodfibre's annual throughput has been sold.

“Our contract with McDermott is a positive step forward for this substantial piece of clean-energy infrastructure,” said Christine Kennedy, President of Woodfibre LNG.

Squamish nation

Woodfibre has engaged with the Canadian Squamish First Nation in designing the environmental aspects of the facility

“Together, we will be building the lowest-emission, most sustainable and innovative LNG export facility in the world,” added Kennedy.

McDermott will manage onshore construction, leveraging Canadian-based contractors and commitments included in Woodfibre LNG's Impact Benefit Agreements with the Squamish Nation.

It is estimated that 650 people will be working on the Woodfibre LNG site at peak construction.

“The EPFC contract commits McDermott to Woodfibre LNG's hiring priority for qualified Squamish Nation members and local workers first, followed by British Columbians and then other Canadians,” the statement added.

Chief Operating Officer of McDermott, Samik Mukherjee, said the Woodfibre award was an opportunity to further demonstrate the company’s LNG and modularization expertise.

In addition to the EPFC work, McDermott will also be responsible for commissioning and start-up services.

“Pre-installation work for the project is planned for early 2022 and will gradually ramp up to September 2023 when major construction is targeted to begin,” added Mukherjee.

Woodfibre LNG is expected to enter commercial service by the third quarter of 2027. 

The British Columbia LNG Alliance has become the Canadian LNG Alliance to reflect the critical role of the fuel in national economic recovery, boosting industry opportunities for Indigenous communities and leading Canada's clean energy transition.