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Canada, British Columbia Greenlight Woodfibre LNG Export Terminal

Canada’s environmental screen has turned out to have wide enough mesh to let through a liquefied natural gas (LNG) export project in a sensitive spot among touchy communities on the Pacific coast of British Columbia (BC).

Federal and provincial environmental authorities have granted combined approval for Singapore-based Pacific Oil & Gas Ltd. to build the proposed Woodfibre LNG terminal in the heart of a notoriously sensitive region.

The firm -- an arm of Indonesian paper, palm oil, construction and energy conglomerate Royal Golden Eagle International (RGE) -- named the project after a prominent location in the most populated and affluent southwest coastal region of BC (see Daily GPI, Aug. 19, 2013).

The terminal site lies at the head of a fjord-like yachting playground known as Howe Sound, just 50 kilometers (30 miles) from Vancouver and 60 kilometers (40 miles) from the mountain resort town of Whistler, home of the 2010 Winter Olympic Games.

The shipping plan calls for LNG tankers to sail every 10 days past spots prized as local jewels in southern BC: Horseshoe Bay, a ferry terminal and marina in one of Canada’s wealthiest neighborhoods, and the Sunshine Coast, a cluster of retirement and artist colonies.

The project includes an agreement to take over the terminal site for C$25.5 million (US$19 million) from Western Forest Products Inc., which ran a pulp mill on the 212-acre lot for 94 years before operations shut down in 2006. Reclamation is under way.

The National Energy Board (NEB) has granted Pacific Oil-RGE a 25-year license to export 2.6 Tcf of gas, or 105 Bcf per year at a daily rate of 300 MMcf starting at a date to be announced between 2017 and 2021.

Pipeline arrangements are under discussion with FortisBC Energy (Vancouver Island) Inc. and Spectra Energy (Westcoast). Supply agreements have been made with Tenaska Marketing Canada and EDF Trading North America LC.

The project’s environmental approval notes that greenhouse gas emissions are partially offset by a commitment to use electric power from BC Hydro, a provincial government-owned supplier. An array of conditions requires respectful treatment of fish and wildlife habitat.

A regional eco-coalition called My Sea to Sky called the approval a step backward that “snubbed” concerns shown during formal review of the project and a floating demonstration by boatloads of environmentalists last year. Municipal governments in the area also opposed the project. The decision was especially startling in light of political imagery of rising green hurdles against harmful industry painted by the Liberal federal government that Canadians elected last year, the group added.

The Woodfibre LNG sponsors swiftly followed up the environmental approval with an announcement Monday of a terminal design contract with Houston-based KBR Inc.

No firm dates have been set for construction or deliveries. Informal forecasts peg the cost of the Woodfibre terminal at C$1.4-1.6 billion (US$1-1.2 billion).

Pacific Oil-RGE has also announced an agreement to work on a sales contract with Beijing Gas Group Co. The deal was ceremonially signed during a November 2015 trade mission to China led by BC Premier Christy Clark, whose Liberal government is an avid promoter of LNG terminals, pipelines, processing and drilling across the province.

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