Woodfibre LNG Terminal

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Woodfibre LNG Terminal is an LNG terminal under construction in British Columbia, Canada.

Location

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Project details

• Owner: Woodfibre LNG Ltd
• Parent: RGE Group (Singapore)(parent of Pacific Energy)(70%), Enbridge (30%)
• Location: Squamish, British Columbia, Canada
• Coordinates: 49.701722, -123.15875 (approximate)
• Type: Export
• Capacity: 2.1 mtpa, 0.32 bcfd
• Cost: US$5.1 billion
• Financing:
• Status: Construction
• Start year: 2027
  • Formerly 2025
• Associated infrastructure: Eagle Mountain-Woodfibre Gas Pipeline Project

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Woodfibre LNG Terminal is a proposed LNG terminal in British Columbia, Canada.

Woodfibre LNG is proposed for the shores of Howe Sound, southwest of Squamish, BC. The National Energy Board (NEB) granted Woodfibre a 25-year export license for 2.1 million metric tons per year, and in October 2016, the company applied for a 40-year license to export 2.9 million metric tons per year. The LNG plant would obtain its gas supplies from the Eagle Mountain-Woodfibre Gas Pipeline (EGP) Project, a proposed expansion of a 47-kilometer portion of existing FortisBC pipeline. In 2016, Guangzhou Gas Group agreed to buy one million metric tons of the plant’s capacity for 25 years, starting in 2020, but the remaining quantity still lacks a buyer. Last November, Woodfibre LNG’s parent company, Pacific Oil & Gas Limited (which is part of the Singapore-based RGE Group), authorized funds to allow the project to proceed. The project’s finances hinge on subsidized electricity provided by BC Hydro, the provincial utility.

Woodfibre project did not begin construction as of January 2017.

A few years prior to 2017, it appeared that British Columbia would enter an LNG boom. Twenty-two LNG proposals aimed for the coast were to move fuel from the methane-rich Montney Basin in northeastern BC to Asia. Sightline reports that the provincial government fueled the LNG boom by granting permits, cheap power, and tax breaks. The provincial government promised it would deposit tax revenues from LNG projects in a “prosperity fund” that could reduce other taxes or eliminate debt.

The LNG excitement in BC has waned. Project backers have completely pulled the plug on several proposals. As of summer 2017 only Woodfibre, one of the smaller of the 22 proposed projects, is slated to go forward.

In June of 2019, Woodfibre signed up BP as its first customer, agreeing to buy 0.75 million tonnes per year (mtpa) of LNG for 15 years starting in 2023, when the project is expected to come onstream.

In July of 2019, Woodfibre LNG secured facility approval from the BC Commission.

In March 2020, a Woodfibre LNG spokesperson informed that construction work planned to commence in summer 2020 has been pushed back until mid-2021 due to the impacts of the COVID-19 pandemic, chiefly because an Asian supplier making components for the project has been shut down to hinder the spread of the coronavirus. Furthermore, construction delay has also become necessary because the preferred U.S. construction contractor for the marine part of the project has filed for Chapter 11 bankruptcy protection in the United States and won't be available to start work as expected.

In late 2020, Pacific Oil & Gas said it now expects to formally approve the project by 2021’s third quarter, with construction to start shortly thereafter (it had earlier expected construction to start in 2020). The project, which is expected to be producing LNG for export by late 2025, is estimated to cost between C$1.6 billion and $1.8 billion.

In May 2021, Woodfibre LNG announced that it had signed a second agreement to sell LNG to BP Gas Marketing Ltd over 15 years on a free on board (FOB) basis, increasing BP's total LNG off-take to 1.5 mtpa from the proposed 2.1 mtpa plant. This latest off-take deal could mean that the project is closer to reaching a final investment decision (FID), potentially in 2021. In November 2021, the project had not reached FID though a Woodfibre LNG spokesperson expressed optimism that FID would be achieved before the end of the year.

In April 2022, Woodfibre LNG gave its EPC contractor McDermott International a Notice to Proceed with construction. Initial construction activities were expected to begin in 2022, with major construction taking place in 2023 and the facility's completion in 2027. A Woodfibre spokesperson said that the company's Notice to Proceed was comparable to a Final Investment Decision, a terminology the company does not use. An analyst with the Institute for Financial Analysis and Energy Economics (IEEFA) told Coast Reporter that this language could allow the company to play things by ear if the project's circumstances change.

In July 2022, Pacific Energy (owned by RGE Group) and Enbridge announced a partnership under which Enbridge acquired a 30% ownership stake.

In March 2023, Woodfibre LNG said that the project's operations would have net-zero emissions by the time the terminal comes online through the use of electrical compressors and carbon offsets.

In July 2023, Qingdao McDermott Wuchuan (QMW) fabrication yard, a joint venture of McDermott and China State Shipbuilding Corporation (CSSC), officially announced the beginning of construction on the project.

According to Woodfibre's communications director, construction on the project was expected to begin in September 2023. In explaining why the project had not announced FID, he also told LNG Prime that Woodfibre LNG, as a privately-owned project, "does not use the same terminology as public companies such as Shell and the LNG Canada project."

In September 2023, reporting by Gas Outlook noted the skyrocketing costs to build the terminal, from US$1.2 billion to US$5.1 billion over the course of seven years.

As of February 2024, site preparation and early construction works were ongoing. The annual GIIGNL report notes that all of the terminal's 2.1 mtpa in output is contracted to BP.

As of June 2024, the project's sponsor had withdrawn an application for a local permit to house workers on a floatel, after it had been rejected by District of Squamish, and decided to house workers on the vessel anyway following a provincial order. The permit had been denied by Squamish councillors in May, due to concerns about the safety of women and girls, waste management and potential natural hazards.

In August 2024, Chinese yard Qingdao Beihai Shipbuilding received a contract from McDermott to convert two liquefied natural gas carriers into floating LNG storage and offloading vessels for the project.

Squamish First Nation

The project's developers entered an unprecedented agreement with the Squamish First Nation, which became, in essence, the project's regulator. The First Nation produced its own environmental impact study, and Woodfibre agreed to abide by all 25 of its recommendations. Woodfibre also agreed to use electricity instead of natural gas for the liquefaction process. By using e-drive, the carbon emissions intensity of Woodfibre’s LNG will be amongst the lowest in the world.

Opposition

The Council of Canadians announced their opposition to Woodfibre LNG terminal in March of 2015 by making a submission to the B.C. Environment Assessment Office, calling on them to reject the project. The Council of Canadians reported that some members of the Squamish Nation are opposed to the project and its associated pipeline, and concerned resident groups such as My Sea to Sky are mobilizing against the project.

As of September 2023, the opposition from the Squamish Nation continued.

In April 2024, Victoria News reported that scientists were studying the possible health impacts of the facility on local residents. The research is examining flaring, which can release toxic gases into the atmosphere. Another study by the Pembina Institute had found that all six proposed LNG in British Columbia, if built, could "emit as much carbon pollution as if the province were burning 34 billion pounds of coal every year."