Vol. 26, No.20 Week of May 16, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

BP underpins Woodfibre

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Doubles take from planned LNG project; First Nations splinter group gets BC cash

Gary Park

for Petroleum News

Canada’s often-overlooked Woodfibre LNG project has received a large helping hand from BP which has now signed a second deal to take output from the proposed export plant near Vancouver.

Woodfibre said it will sell 750,000 metric tons a year to BP Gas Marketing over 15 years, doubling BP’s total off-take to 1.5 million mt from the planned initial plant capacity of 2.1 million mt.

The deal is seen as an important advance for the C$1.8 billion project as sets a final investment decision in the third quarter by its owner, Pacific Oil & Gas.

A Woodfibre spokeswoman said the company is now seeking contracts for the remaining 29% of annual capacity but will not make those deals a mandatory element of its decision to proceed with construction.

She said Woodfibre is engaged in final engineering work while attempting to revise its environmental permit to allow floating accommodation for up to 600 workers during construction.

Pacific Oil & Gas President Ratnesh Bedi said BP is among the companies turning to LNG for “sustainable, stable gas that will supply a clean energy mix” at a time when the outlook for LNG faces uncertainty.

Work pauses as demand grows

In just the last two months, LNG developer Annova stopped work on its export plant in Brownsville, Texas, and Pembina Pipeline paused development of its Jordan Cove project in Oregon.

On the positive side, global LNG demand has increased every year since 2012, propelled by fast-rising demand in Asia.

But global LNG buyers have shown some hesitancy in recent times due to overbuilding of export terminals in 2019 and demand destruction resulting from COVID-19.

BC finances hereditary chiefs

While these fluctuations persist, the British Columbia government has added to the confusion by financing Wet’suwet’en hereditary chiefs in northwestern B.C. who have tried to sink plans for the C$40 billion LNG Canada project.

The government of Premier John Horgan has granted C$7.2 million to the chiefs to promote “unity” in the fractured First Nation divided between elected and hereditary leaders, with the bulk of the elected communities counting on benefits agreements they have signed with the Shell-operated project.

“British Columbia’s funding announcement to ‘unify’ the Wet’suwet’en nation is the latest in a year-long series of insults and betrayals of the elected representatives of the Wet’suwet’en people,” declared one of the elected chiefs from five clans Maureen Luggi and two councilors.

“For nearly a year the (Canadian and B.C. governments) and the recipients of this funding have been negotiating in absolute secrecy about communal aboriginal rights and title of the Wet’suwet’en people,” they said.

“We are being removed from any meaningful participation in the future of our territory. Despite every appeal to right and reason, the province has handed C$7.2 million to an unelected, unrepresentative, unmandated, unaccountable society to continue their secret negotiations.”

Some of the new funding will be used to convert (recently acquired school property) into a Wet’suwet’en governance center, which is expected to be a focal point in what the B.C. government says will allow the divided First Nation to “resolve their own matters that is central to self-determination.”

This latest twist in a bitter dispute further complicates the outlook for TC Energy’s Coastal GasLink pipeline to deliver natural gas feedstock to the LNG Canada liquefaction plant and tanker terminal.

That construction was brought to a halt 16 months ago by supporters of the hereditary chiefs, when they blockaded one of Canada’s two main rail lines to the Pacific Coast, costing governments and companies hundreds of millions of dollars in lost business.

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