Page 8 - GLNG Week 12

GLNG AMERICAS GLNG
Woodfibre LNG construction delayed
PROJECTS & COMPANIES
CONSTRUCTION on the planned Woodfibre LNG project in British Columbia, Canada has been delayed by a year, partly as a result of the coronavirus (COVID-19) pandemic. The delay comes as the global LNG industry braces for a global drop in demand for the super-chilled fuel, with countries locking down to various degrees in order to stem the spread of the pandemic.
CBC News cited a Woodfibre LNG spokes- person, Rebecca Scott, as saying this week that substantial construction, previously expected to start this summer, would not now take place until the second half of 2021. This comes after a fabrication yard in Asia that was making compo- nents for the project was shut down to hinder the spread of COVID-19.
Scott said that another cause for the delay to Woodfibre LNG was that the preferred US con- struction contractor for the marine part of the project had filed for bankruptcy protection and would therefore not be available to start work as planned.
The contractor is reported to have entered
bankruptcy protection in January, and the process is anticipated to last until July at the earliest, local media reported. Meanwhile, Woodfibre LNG is applying to the BC Environ- mental Assessment Office for a five-year exten- sion to its environmental certificate, which is due to expire in October.
“The key thing here is that we’re full steam ahead,” Scott said. “We’re still meeting all of our pre-construction commitments. Really nothing changes for us except our projection for start of construction.”
Once construction does begin, it is predicted to take about four years. The project will export 2.1mn tonnes per year (tpy) of LNG over a 40-year period. No cost estimate has been pro- vided for the facility.
News of the Woodfibre delay follows an announcement by the LNG Canada meg- aproject, also under development in BC, that it will reduce the size of its construction workforce by half in an effort to help local COVID-19 efforts.™
Sempra Energy postpones FID on Energía Costa Azul LNG
INVESTMENT
NEWYork-listedSempraEnergyhasdelayedits final investment decision (FID) on the construc- tion of an LNG export facility in Baja California, Mexico, and may do the same for a separate pro- ject in Texas.
In a conference call on March 24, Sempra executives said that they would wait until the second quarter of this year to proceed to the FID stage with Energía Costa Azul LNG. The com- pany had stated previously that it would make this move in the first quarter of 2020, but it has changed its plans in light of the coronavirus (COVID-19) outbreak, which has pulled energy demand down around the world.
Sempra had also been intending to make a decision on the Port Arthur LNG project, which envisions the construction of an LNG terminal on the Texas coast, in the third quarter of 2020. But company reps said during the conference call that they could not remain committed to that deadline. “The current economic environ- ment may impact the schedule,” said Justin Bird, Sempra’s president.
The postponement of FID on Energía Costa Azul LNG will not affect Sempra’s non-binding
LNG supply arrangements with Total (France), Mitsui & Co. (Japan) and Tokyo Gas Co. (Japan). Each of the three companies has signed a 20-year agreement to buy around 800,000 tonnes per year (tpy) of LNG from Energía Costa Azul LNG. These three agreements will allow Sempra to export 100% of output from the plant’s first phase, which will have a production capacity of 2.4mn tpy.
Last October, Mitsui & Co. entered into a memorandum of understanding (MoU) with Sempra on the future expansion of Energía Costa Azul LNG. In the document, the two com- panies pledged to help each other develop LNG export capacity at the facility. They outlined plan for building additional trains that would bring the plant’s capacity up to around 12mn tpy.
Sempra is repurposing an existing facility – namely, an LNG import terminal built by its Mexican subsidiary, IEnova – to establish a gas liquefaction and export complex on Mexico’s Pacific coast. The import facility began operat- ing in 2008 and is capable of regasifying up to 1bn cubic feet (28.32mn cubic metres) per day of LNG.™
P8
w w w . N E W S B A S E . c o m Week 12 26•March•2020