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Providing coverage of Alaska and northern Canada's oil and gas industry
December 2018

Vol. 23, No 49 Week of December 09, 2018

Woodfibre LNG project close to launch

Construction could start in first quarter of year, but regulatory, aboriginal issues continue; agreement with CNOOC for offtake

Gary Park

for Petroleum News

More pieces have been put in place for the Woodfibre LNG project north of Vancouver that point to a possible start of construction in the first quarter of 2019.

But doubts still hang over the complex regulatory process, with one element of the aboriginal community not yet satisfied its demands have been met.

In the latest developments, Woodfibre has signed an off-take agreement with state-owned China National Offshore Oil Corp., CNOOC, covering a potential 750,000 cubic meters of LNG a year - about one third of the operation’s planned storage capacity - for 13 years, starting in 2023.

That was quickly followed by word that the Squamish Nation, whose 2,600 square miles includes the Woodfibre LNG liquefaction at a former pulp mill near Squamish, voted 8-6 to support three impact benefit agreements worth C$1.1 billion.

The deal includes C$225.6 million in cash payments to be made to the nation of 3,600 over 40 years, C$16.1 million in training and education programs, and ventures for Squamish businesses worth up to C$872.4 million.

The agreement involved the Squamish Nation, Woodfibre LNG, pipeline company FortisBC and the British Columbia government, though it is not clear how much each of the three parties financing the C$1.6 billion project will contribute.

The decision was a disappointment for environmental organization My Sea to Sky, which has opposed the LNG venture since it was founded in 2014.

Executive director Tracey Saxby said Squamish residents are “scared about the very real consequences that climate change is already having on our communities. We cannot build new fossil fuel infrastructure when we are facing a climate crisis.”

In addition, Squamish Councilor Khelsilem (who goes by his traditional name) said his community is not yet convinced it can exert maximum influence over a project on its territory, although he did concede the Squamish were given a unique opportunity to conduct their own environmental assessment of Woodfibre’s proposal.

Byng Giraud, country manager with Woodfibre LNG, said Woodfibre is the first industrial project in Canada to be awarded an environmental certificate by an indigenous government.

The LNG facility gained Canadian government approval in 2016 after it was deemed unlikely to hurt the environment.

The same year the owners announced a deal with Guangzhou Gas Group to deliver 1 million metric tons of LNG a year to the Chinese gas company.






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