Woodfibre, a liquefied natural gas (LNG) export project planned for the Pacific coast of British Columbia, has moved a step closer to sanctioning after it awarded a C$1.6 billion ($1.3 billion) construction contract to engineering giant McDermott International Ltd.

Woodfibre

The LNG project on Tuesday also set a schedule to begin pre-installation work in early 2022 and accelerate major construction in September 2023. Completion of the facility is preliminarily planned for the second half of 2027.

McDermott plans to use a construction method called NetZero Modular LNG to build the project. 

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“The strategy provides multiple pathways through design, execution and construction to reduce operational and project emissions,” said the two companies. The project is also billed as a gain for international climate change policy that demands gas exports reduce greenhouse gas emissions.

“The award is a tremendous opportunity to further demonstrate how our LNG and modularization expertise enables a new generation of sustainable energy solutions,” said McDermott COO Samik Mukherjee.

As designed, the Woodfibre facility could export up to 2.1 million metric tons/year of LNG. Supply may include 260 MMcf/d produced from the Montney Shale. According to Woodfibre, the exports could reduce emissions by coal used in Asian countries by up to 3.5 million tons/year.

The Covid-19 pandemic and unsettled market conditions postponed a planned mid-2020 construction start. The project was granted a regulatory extension until October 2025.

Singapore-based owner Pacific Oil & Gas Ltd. already has secured one supply source with a takeover two years ago of Calgary producer Canbriam Energy Inc.  Woodfibre also secured a sales and purchase agreement in 2019 with a unit of BP plc. In addition, it has a sales arrangement with China’s CNOOC Gas and Power Trading & Marketing Ltd.

Woodfibre also has a 40-year Canadian gas export license, a pipeline service agreement with utility FortisBC, as well as a cooperation and benefits agreement with the Squamish Nation.