Woodfibre LNG says contract with BP Gas ties up 70% of proposed facility's capacity


CALGARY — The company proposing the Woodfibre LNG export project near Squamish, B.C., says it has struck a second sales contract with BP Gas Marketing Ltd. that allows it to account for over 70 per cent of future production from the plant.

The 15-year contract to supply 750,000 tonnes of liquefied natural gas per year doubles the initial commitment by BP Gas announced in 2019 and is an important step for the $1.8-billion project as it faces a third-quarter decision by its owner, Pacific Oil & Gas Ltd., on whether to proceed.

Woodfibre spokeswoman Rebecca Scott says the company is trying to sign contracts for the remaining 29 per cent of the 2.1-million-tonne annual capacity of the project but doesn't require those to go ahead with construction, which is expected to take about four years.

She says Woodfibre LNG is currently undergoing final engineering work while attempting to amend its environmental permit to allow floating accommodation for up to 600 workers during construction.

Scott says housing workers on barges is being considered after consultations with the community, as a partial solution to the high prices and low availability of housing on land near the site, a former pulp and paper mill located halfway between Vancouver and Whistler.

At one time, about 20 LNG terminals were proposed for the West Coast but the $40-billion LNG Canada project headed by Shell Canada is the only one to reach the construction stage so far.

“Forward-looking companies like BP are turning to projects like ours for sustainable, stable gas that will supply a clean energy mix,” said Pacific Oil & Gas president Ratnesh Bedi in a release.

“We look forward to working with BPGM to deliver Canadian natural gas from one of the lowest carbon footprint LNG facilities in the world, and help advance the climate goals of growing economies as they phase away from coal, lower their emissions, and meet net-zero targets.”

Work on the LNG project was delayed more than a year ago after the main engineering, procurement and construction contractor, McDermott, filed for Chapter 11 bankruptcy protection in the United States, and because of delays in procuring components in Asia during the pandemic.

McDermott has since emerged from the court process to continue its contract with Woodfibre, Scott said.

This report by The Canadian Press was first published May 6, 2021.