Woodfibre says it is proceeding with B.C.’s first LNG project

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Woodfibre LNG has become the first energy project in British Columbia to forge ahead with plans to construct a terminal to export liquefied natural gas.

"We are just delighted today to be able to say that LNG in British Columbia is finally becoming a reality," B.C. Premier Christy Clark said Friday during a news conference at Woodfibre LNG's site near Squamish, located 65 kilometres north of Vancouver

Western Forest Products Inc. sold the industrial site, which has been undergoing a cleanup, to Woodfibre LNG in 2013.

"But this facility is going to be an example of how, rather than industrial jobs can pollute a community, this will be an example of how industrial jobs – high-paying, stable, middle-class jobs – can work as a way to also fight climate change and make our communities cleaner," Ms. Clark said. She argues that since LNG exports to Asia would displace coal, cleaner-burning natural gas from Canada will reduce the growth rate in global emissions of greenhouse gases, though critics disagree with her assessment.

Western Forest Products closed its Woodfibre pulp mill in 2006. A decade later, Woodfibre LNG said Friday that it is eager to revive the site and begin construction of its $1.6-billion project in 2017. Woodfibre LNG is forecast to create 650 construction jobs and have 100 full-time positions once the plant begins operations in 2020.

Woodfibre LNG is privately owned by Singapore-based RGE Pte. Ltd. and controlled by Indonesian businessman Sukanto Tanoto. The board of directors at Pacific Oil & Gas Ltd., which is part of RGE, approved funding for the B.C. LNG project.

Ms. Clark played down fears of LNG carriers encountering major problems along Canada's West Coast, saying the risks are lower when compared with crude oil. "We all know that LNG is very different, creates a much smaller environmental impact if it's released into the environment. It doesn't sink into the ocean and it escapes into the air," said Ms. Clark, who wore a hard hat during the announcement. "Nonetheless, though, Woodfibre and British Columbia take any level of risk very, very, seriously."

Byng Giraud, Woodfibre LNG's country manager, said he is looking forward to shipments being transported to Asia, including for two buyers lined up in China. The Canadian project has signed a memorandum of understanding with Beijing Gas Group Co. Ltd. and inked an advanced agreement with Guangzhou Gas Group Co. Ltd.

"We commit today to build this project, a project that is right for Squamish and right for B.C.," Mr. Giraud said.

Squamish Nation Chief Ian Campbell, who did not attend Friday's news conference, said there remains plenty of work to do on his group's independent environmental assessment of Woodfibre LNG. "It's too early to celebrate," he said in a statement. "The Squamish Nation set out its 25 conditions to specifically protect sensitive land and marine habitats – in and around the proposed project site. And only when all those conditions have been resolved will we sign the deal."

Woodfibre LNG said its liquefaction facilities will be efficiently powered by electricity, receiving an industrial rate from provincial Crown corporation BC Hydro. By contrast, major LNG projects in northern B.C. envisage relying largely on natural gas to fuel their plants.

With LNG prices in Asia at low levels, the vast majority of the 20 LNG proposals in British Columbia have been rendered unviable.

Rich Coleman, B.C.'s Natural Gas Development Minister, said the announcement by Woodfibre LNG amounts to what the industry calls a final investment decision.

Pacific NorthWest LNG, led by Malaysia's state-owned Petronas, needs to examine a wide array of factors, so that project will likely make its final investment decision after B.C.'s general election in May, Mr. Coleman said.

Critics said British Columbia's Liberal government and Woodfibre LNG are moving in the wrong direction.

Peter McCartney, Wilderness Committee climate campaigner, said the B.C. Liberals are trying to save face after they heavily touted LNG's economic prospects during the 2013 provincial election.

Matt Horne, B.C. associate director at the Pembina Institute, a clean-energy think tank, said the B.C. government's favourable tax treatment of the province's fledgling LNG sector undermines the battle against climate change.