Pacific Energy and Enbridge to partner on US$5.1b Woodfibre LNG Project

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By Louis Allen - 

Amid a global energy crisis, Pacific Energy and Enbridge (TSX: ENB) will jointly invest in the development and operation of the US$5.1 billion Woodfibre liquefied natural gas (LNG) project in Canada’s British Columbia region.

To be built near Squamish, Woodfibre will be a 2.1 million tonne per annum LNG export facility, with 250,000 cubic metres of floating storage capacity.

The project was made possible by two long-term offtake agreements with BP Gas Marketing Limited for 15 years – representing 70% of the proposed capacity. There are additional commitments under development for up to 90% of the facility’s capacity.

Enbridge president and chief executive officer Al Monaco said the partnership offers the opportunity to further reduce greenhouse gas emissions and embrace the energy transition.

“As a leader in the energy transition, Enbridge is excited to participate in the Woodfibre LNG facility through this partnership,” he said.

“This facility will provide global LNG markets with a safe, secure and sustainable source of British Columbia natural gas through long-term transportation agreements on our T-South pipeline system.”

Under the partnership, Enbridge will invest a 30% stake in the project, while Pacific Energy will hold the other 70%.

Enbridge provides energy to millions of consumers across Canada, the US and Europe through its natural gas, oil, renewable power and wind networks, while Pacific Energy, part of the Singapore-based RGE group of companies, is an independent energy resources development company.

Energy transition

Woodfibre is set to be one of the lowest-emission LNG export facilities in the world.

Its electric motor drives will be fuelled by renewable hydroelectric power.

The project obtained a non-treaty Indigenous-issued environmental assessment certificate and is the first project approved under the Government of Canada’s “Five Principles” for environmental assessment.

While Pacific Energy will take responsibility for daily operations, Enbridge will continue its execution and governance talks.

McDermott International will overlook the construction efforts on the project.

The project is scheduled to be operational by 2027.

“Expanding global access to natural gas through LNG will play a critical role in North America’s energy future and will help to reduce the world’s greenhouse gas emissions through the displacement of coal-fired power generation, creating strong alignment with our ESG goals,” Mr Monaco added.

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