Enbridge Inc. logo. presented at the company’s annual meeting in Calgary, Thursday, May 12, 2016. THE CANADIAN PRESS/Jeff McIntoshJeff McIntosh/The Canadian Press
Enbridge Inc. ENB-T is investing $1.5 billion for a 30 percent stake in Woodfibre’s LNG terminal in British Columbia, hoping to shore up the long-delayed project that needed a deep-pocketed investor to help export liquefied natural gas. in asia
Woodfibre aims to become Canada’s second-largest exporter of the fuel, after Shell PLC-led LNG Canada, which has a terminal under construction in Kitimat, BC, with plans to begin shipments to Asia in 2025.
Woodfibre would begin construction in September 2023 and begin exporting natural gas in liquid form to Asia in 2027 from its industrial site near Squamish, BC, 65 kilometers north of Vancouver.
The Squamish-area LNG facility, to be built on the site of a pulp mill that closed in 2006, would have an export capacity of 2.1 million tonnes per year. LNG Canada, on the other hand, is much larger, with an initial export capacity of 14 million tonnes per year.
Enbridge said Friday that Woodfibre has lined up buyers for the fuel in Asia, including through a 15-year commitment with London-based BP Gas Marketing Ltd., which would account for 70 percent of the terminal’s capacity. export
The Calgary-based energy infrastructure company will buy 30% of Woodfibre, while Pacific Energy Corp. Ltd. will own the remaining 70%. Pacific Energy is part of privately owned RGE Pte. Ltd. of Singapore and controlled by Indonesian businessman Sukanto Tanoto.
Pacific Energy owns Pacific Canbriam Energy Ltd., which is ready to supply its natural gas from northeastern BC to be transported through pipeline systems to Woodfibre.
Construction costs are expected to total $5.1 billion, including the Squamish-area export terminal and other costs, particularly related to FortisBC’s proposed Eagle Mountain-Woodfibre pipeline.
Woodfibre president Christine Kennedy said LNG will play a crucial role globally as a transition fuel to help displace the use of thermal coal in electricity production. “It’s always important to understand and recognize that, in the absence of LNG, coal plants continue to be built around the world,” Ms. Kennedy said in an interview.
But Tracey Saxby, chief executive of climate activist group My Sea to Sky, said LNG should not be seen as a good transition fuel for the world. “The construction of LNG facilities is a multi-decade investment that will increase fracking in northern BC and lock the province into fossil fuels for decades,” said Ms. Saxby.
Brian Johnson, Enbridge’s vice-president of Canadian gas transmission and midstream, said Woodfibre emerged as an ideal fit after Enbridge investigated potential investments across Canada, with challenges in transporting natural gas from western Canada to the east coast “The struggle is how do you get all the western Canadian gas over there? I mean the cost structure is different,” said Mr. Johnson.
Backers of two East Coast export proposals, Pieridae Energy Ltd.’s Goldboro LNG. in Nova Scotia and Repsol SA’s Saint John LNG in New Brunswick are studying the economics of shipping LNG to Europe but face pipeline constraints in central Canada and New England.
Mr. Johnson said LNG exported from BC to Asia would still indirectly help Europe as the continent tries to wean itself off natural gas from Russia. “Basically, it’s a global market. So the more you can get to Asia, the more other things can go to Europe,” he said, adding that LNG exports to Asia would free up fuel supplies to Qatar and elsewhere to be redirected to Europe.
Omar Mawji, an analyst at the BC Center for Innovation and Clean Energy, said Enbridge has a BC pipeline system that would feed FortisBC’s planned Eagle Mountain-Woodfibre pipeline.
“This is a very easy way for Enbridge to participate in LNG on the West Coast without taking too many risks,” he said.
Mr. Mawji warned that construction costs are skyrocketing on a number of energy projects, including at Woodfibre, which had forecast a $1.6 billion price tag for the export terminal during an opening ceremony in 2016.
FortisBC’s plans include running two pipelines through a nine-kilometre tunnel that would pass through Monmouth Ridge Mountain and below the Skwelwil’em Squamish Estuary Wildlife Management Area. The costs of this tunnel and two pipelines alone are estimated at $341 million. This number does not include expenses related to the construction of the rest of the 50-kilometer pipeline route.
Earlier this year, FortisBC notified BC’s Office of Environmental Assessment of its latest plans, which the regulator will review in a collaborative process with the Squamish Nation.
“As the regulator of the project, our role does not change despite Enbridge’s investment,” Squamish Nation spokesman Wilson Williams said in a statement. “The Squamish Nation will still hold the project to the rigorous standards set out in the impact benefit agreement to ensure our lands and waters are respected, as well as our historical ties and the cultural significance of the land.”
On Friday, Enbridge said it posted a second-quarter profit of $450 million, compared with nearly $1.4 billion in the same period in 2021.
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