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NorthAmOil COMMENTARY NorthAmOil
Woodfibre LNG preparing to proceed with construction
News that construction could soon begin on Wood bre LNG is a further sign of progress, however slow, for Canada’s nascent LNG industry, writes Anna Kachkova
BRITISH COLUMBIA
WHAT:
Western Canada is inching forward on LNG export facility development.
WHY:
An FID is looming for the Wood bre LNG project, while the partners
in Kitimat LNG have proposed a bigger facility.
WHAT NEXT:
The new export terminals could yet experience delays as construction moves ahead.
CONSTRUCTION is expected to begin in the coming weeks on the proposed Wood bre LNG project on the British Columbia coast in Western Canada. Wood bre LNG, a subsidiary of Singapore-based Paci c Oil and Gas, is cur- rently nalising its engineering, procurement and construction (EPC) contract. Woodfibre LNG’s president, David Keane, told the Financial Post on August 19 that he expected to sign the contract soon, before construction can begin on the export terminal in Squamish, BC.
“Our senior management, our chairman [Sukanto Tanoto], has been actively involved and once we sign our EPC contract then the next phase is moving into active construction,” Keane said. “Before we can proceed, we have to sign the contract, so we are hoping to have a nal invest- ment decision [FID] at the end of the summer or shortly therea er.”
The comments come as a boost for Cana- da’s nascent LNG industry, which has stalled in recent years with several proposed export ter- minals being scrapped before a small number started moving forward.
Slow progress
Canada’s LNG hopes are undergoing something of a revival, largely thanks to an FID announced last year on the Royal Dutch Shell-led LNG Can- ada project. e megaproject, estimated to cost CAD40bn ($30bn), is anticipated to become operational by 2025. It will initially be comprised of two trains, each with a capacity of 7mn tonnes per year (tpy). e consortium behind the pro- ject, which also includes a number of Asian com- panies – Malaysia’s Petronas, PetroChina, Japan’s Mitsubishi and Korea Gas (KOGAS) – has said there is scope to add a further two trains later down the line.
LNG Canada’s CEO, Andy Calitz, said in March that an FID on Phase 2 would be made before production from the plant’s rst phase began.
In June, the Canadian government con rmed that it intended to invest CAD275mn ($206mn) into the LNG Canada project. Canadian Minis- ter of Finance Bill Morneau announced that
CAD220mn ($165mn) would be directed towards buying energy-e cient gas turbines for the project. Meanwhile, CAD55mn ($41mn) would be spent on replacing the Haisla Bridge in Kitimat, which is predicted to experience an increase in tra c as a result of LNG Canada’s development.
The project represents the “largest private sectorinvestmentinCanadianhistory”,accord- ing to a federal government news release. e government’s support illustrates Ottawa’s con- cerns over global market access for Canadian natural gas.
Further good news for Canada’s LNG indus- try came in April, when Chevron Canada and Woodside Energy led an application to increase the capacity of their planned Kitimat LNG pro- ject to 18mn tpy with a 40-year export licence. e partners had previously planned for the ter- minal to have a capacity of 10mn tpy, as well as an export licence covering a shorter term. ey submitted their revised application to Canada’s National Energy Board (NEB), with an updated
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w w w . N E W S B A S E . c o m Week 33 20•August•2019