LNG

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 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 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.