Woodfibre close to LNG deal

The spotlight on British Columbia LNG proponents to see who leads the way in shipping LNG to Asia has landed once more on the Woodfibre consortium.

If the current round of talks to line up customers bears fruit, the company hopes to start selling 1 million metric tons a year over 25 years to Guangzhou Gas in 2020.

And Byng Giraud, the Canadian manager for Woodfibre, is hopeful a final investment decision will be made by late 2016.

He said that as soon as “one customer is in the door, it’s easier to get the second.”

Giraud said that if Guangzhou follows through on a preliminary agreement signed May 9 to acquire a 10 percent stake in the LNG venture that could be sufficient for the partners to sanction the project.

Guangzhou, a unit of Shanghai-listed Guangzhou Development Group, has been working for the past 8 months on a memorandum of understanding to export the LNG.

The development group is majority-owned by a Chinese city government and runs businesses from utilities and infrastructure to retail.

The gas unit serves 1.43 million customers in the city with annual sales of 1.2 billion cubic meters in 2014.

Woodfibre, backed by Indonesian billionaire Sukanto Tanoto, plans to build its liquefaction plant and LNG tanker terminal at a former pulp mill site at Squamish north of Vancouver.

Although the company concedes it faces competition from LNG suppliers in the southern United States and East Africa, it holds an edge because of the ties Guangzhou has in Chinese pulp, paper and other industries.

Giraud said the final decision “boils down to price. It’s tough but we are confident.”

- GARY PARK