Enbridge takes stake in Woodfibre LNG

Canadian pipeline operator Enbridge has agreed to buy a 30 percent stake in Pacific Energy’s Woodfibre LNG export project in British Columbia.

Th two firms announced this in a statement on Friday saying they have signed an agreement to jointly invest in the construction and operation of the Woodfibre LNG project.

Under the partnership agreement, Enbridge would invest in a 30 percent ownership stake in the C$5.1 billion Woodfibre LNG project, with Pacific Energy retaining the remaining 70 percent stake in the facility, the statement said.

Capital for the project includes a contribution in aid of construction for the expansion of FortisBC Eagle Mountain to Woodfibre pipeline which will connect the facility through FortisBC’s system to Enbridge’s T-South natural gas transmission system, the partners said.

Pacific Energy and Enbridge will each make pro-rata contributions during construction through a combination of asset level financing and equity investments.

In exchange for its capital contribution, Enbridge would receive a preferred equity interest that provides predictable future cash flows, according to the statement.

Also, the partners will jointly participate in project’s execution and governance of ongoing operations, while Pacific Energy retains responsibility for daily operations.

“Enbridge is an accomplished North American energy company with substantial natural gas operations in B.C. and Woodfibre LNG is pleased that the companies have entered into this investment agreement,” Christine Kennedy, president of Woodfibre LNG said in the statement.

Al Monaco, Enbridge’s president and CEO said this facility would provide global LNG markets with a “safe, secure and sustainable” source of B.C. natural gas through long-term transportation agreement on the company’s T-South pipeline system.

“This investment is a natural extension of our export pipeline strategy, with strong commercial underpinnings,” he said.

BP to buy most of volumes, McDermott and Siemens Energy to work on the plant

Woodfibre LNG’s project will have a production capacity of 2.1 mtpa and 250,000 cbm of floating storage capacity near Squamish.

The project has two long-term offtake agreements with BP Gas Marketing for 15 years representing 70 percent of the capacity, with additional commitments in development for up to 90 percent, according to Woodfibre LNG.

Moreover, Woodfibre LNG recently awarded a contract to Siemens Energy to work on the all-electric plant.

Prior to that, it issued a notice to proceed to US contractor McDermott to start work on the project, while it also said it would spend $500 million on its planned terminal.

Woodfibre LNG has not yet announced a final investment decision on the plant.

It expects to reach substantial completion of the project in 2027 and begin commercial operation by September of that year.

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