Pacific Energy Corp. Ltd.’s Woodfibre LNG project in Western Canada is fully subscribed after the latest agreement with BP plc, according to the company.
BP has inked a third sales and purchase agreement for 15 years of offtake on a free-on-board basis from the export project in British Columbia, covering a combined 1.95 million metric tons/year (mmty). The remainder would be available to BP on a “flexible offtake basis,” according to the firm.
Woodfibre LNG is targeted to produce at least 2.1 mmty from its single train currently under construction.
“As the world seeks secure, affordable and lower carbon energy, global demand for LNG is expected to continue to grow and this additional Canadian supply source will further enhance bp’s supply positions in the Pacific region,” BP’s Jonathan Shepard, vice president of global LNG trading and origination, said.
Woodfibre LNG offers BP a route to sell net-zero LNG cargoes from North America to Asia without using the Panama Canal. BP has been targeting growing its LNG portfolio to around 33 million tons by 2030, while also lowering the carbon profile of its natural gas supply.
Woodfibre is designed to use all electric-drive equipment powered by hydroelectricity. Pacific Energy has also been progressing plans for carbon offsets and environmental programs with the Squamish Nation.
BP has also agreed to secure natural gas supply for the project during the 15-year term of its offtake agreement. Woodfibre LNG would be fed by an expansion of the Eagle Mountain pipeline built by FortisBC.
In August, a Chinese unit of McDermott disclosed that work had begun on Woodfibre’s first modular unit targeted for delivery in 2025. BC regulators also eased environmental restrictions on the worksite in Squamish.
Last year, Enbridge Inc. reached an equity agreement with Pacific Energy, taking a 30% stake in the project and agreeing to help fund the expansion of the pipeline that would help feed the project.
Woodfibre is one of two Canadian projects currently under construction and one of eight BC projects being tracked in NGI’s LNG Insight Project Tracker. The 14 mmty capacity first phase of LNG Canada developed by Shell plc is expected to begin first shipments in 2025.
