Canada’s Woodfibre LNG seals third supply deal with BP

Canada’s Woodfibre LNG, a unit of Pacific Energy, has signed the third supply deal with UK-based energy giant BP for volumes from its planned export plant in British Columbia.

With the additional contract to offtake 0.45 million tonnes of LNG per year (mtpa) for 15 years on a free on board (FOB) basis, all of the LNG production from the Woodfibre LNG export facility is now committed for sale to BP, according to a statement by BP.

BP said that firm offtake totals 1.95 mtpa of LNG and the remainder is on a “flexible offtake basis”.

In addition to securing LNG offtake rights from the project, BP will provide transportation of gas to the Woodfibre LNG export facility during the 15-year contact term, it said.

The two firms signed the second supply deal in 2021, increasing BP’s total LNG offtake to 1.5 mtpa, or more than 70 percent of Woodfibre’s future annual production.

The facility will have a capacity of 2.1 mtpa.

BP said in the statement it continues to look for opportunities across the gas value chain, as it sees LNG as an “essential part of the energy transition and its own pivot to becoming an integrated energy company.”

As BP works towards building an LNG portfolio of 30 million tonnes by 2030, the additional Canadian west coast supply source expands the company’s “flexible, high-quality LNG portfolio and further enhances the company’s capability to meet the growing global natural gas demand,” the firm said.

Woodfibre LNG to start construction work

Woodfibre LNG told LNG Prime last month that it plans to start construction work in September on its $5.1 billion LNG export facility near Squamish, British Columbia.

The company expects to launch operations at this onshore gas processing and liquefaction facility with floating storage of about 250,000 cbm in 2027.

In November 2021, Woodfibre LNG awarded the engineering, procurement, fabrication, and construction (EPFC) contract to McDermott.

After that, the LNG terminal developer issued a notice to proceed to McDermott in April last year to start work on its LNG terminal.

Qingdao McDermott Wuchuan (QMW), a joint venture consisting of US contractor McDermott and China State Shipbuilding Corporation, recently started building the first module for Woodfibre LNG.

QMW will build 19 modules for Woodfibre LNG and plans to complete the project in the third quarter of 2025.

Besides McDermott, Woodfibre LNG previously also awarded a contract to Siemens Energy to work on the all-electric plant.

Woodfibre LNG did not announce a final investment decision on the project.

However, as a privately-owned project, Woodfibre LNG “does not use the same terminology as public companies such as Shell and the LNG Canada project,” the company previously said.

“Notice to proceed is similar to an FID in that it’s a final go-ahead to move into construction,” Woodfibre LNG said.

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