British Columbia is on track to have at least one liquefied natural gas project up and running before the next provincial election in 2017, with Woodfibre LNG near Squamish shaping up to be a good bet, says B.C. Premier Christy Clark.
Woodfibre LNG, privately owned by Singapore-based RGE Pte. Ltd., expects to make a final investment decision in 2015 on whether to approve the project. If RGE gives the green light, then the goal is to be in operation by March, 2017. That happens to be weeks before the B.C. general election set for May of that year.
It marks the second letter of intent signed between the B.C. Liberal government and LNG proponents, after a pact reached earlier this week between the province and Malaysia's state-owned Petronas, which heads the Pacific NorthWest LNG venture near Prince Rupert. Pacific NorthWest LNG, whose export capacity would eventually be up to 10 times larger than Woodfibre, hopes to start shipping natural gas in liquid form in late 2018.
"Woodfibre is a smaller investment, but it is going to be, we think, on line faster," Ms. Clark said in a phone interview. "So it will be sending its ships to Asia earlier. It could be one of the first liquefaction plants that sends ships to Asia from British Columbia."
The Premier is leading a B.C. delegation on an Asian trade mission that kicked off Sunday in Malaysia and ends Friday in Hong Kong. Ms. Clark signed a letter of intent with Woodfibre lead director Imelda Tanoto on Wednesday in Singapore to "secure mutual interests." In the letter, the province vows to hammer out details of taxes on proposed LNG export terminals by Nov. 30, and Woodfibre agrees to sort out items that will lead to a project development agreement.
The B.C. Liberals campaigned hard in last year's May provincial election on the promise of huge economic benefits from exporting LNG, posting a surprising re-election victory over the Opposition NDP.
There are 14 proposals to export LNG from B.C. to Asia, but the province faces fierce global competition, notably rival projects in Australia and the United States. Industry observers say the province is also in a race against time as new supplies pour into Asia over the next six years, and it is crucial for B.C. LNG projects to start construction within a couple of years to capture market share.
"Just because the critics think this is going to be hard doesn't mean we're going to start waving the white towel. I'm determined we're going to win this race," Ms. Clark said. "And the only way that we're going to win it is to aim high, work hard and put our pedal to the metal every day. We have invested a lot of time and a lot of political capital in this. We told people we were going to do this during the election. We ran on it, we got elected on it and we are going to deliver on it."
The National Energy Board approved Woodfibre LNG's export licence application last December, and an environmental assessment is under way. Environmentalists are concerned that Woodfibre LNG's industrial activities on a former pulp mill site will detract from efforts to raise Howe Sound's profile as a place for tourism and recreation. But Woodfibre LNG points out that the site is equipped with a line connected to BC Hydro's grid, and having that electricity will help produce LNG efficiently.
The Tanoto family from Indonesia controls RGE, which has global interests in a wide range of investments from energy to pulp and paper. RGE is a partner in the Rudong LNG import terminal north of Shanghai.
Ms. Tanoto said Woodfibre is making progress, noting the importance of co-ordinating plans with the B.C. government. "Reaching this agreement with Premier Christy Clark is a strong signal to our company that the government of British Columbia is committed to the success and viability of the LNG sector," Ms. Tanoto said in a statement from Singapore.