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.
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.
“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.
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