UPDATED: Woodfibre LNG has a new customer

My Sea to Sky calls company’s announcement ‘smoke and mirrors’

Pacific Oil & Gas Limited, parent company of Woodfibre LNG Export, announced June 26 it has signed a binding sales and purchase agreement with BP Gas Marketing Limited, for the delivery of liquefied natural gas from its Woodfibre LNG export facility in Squamish.

“We are honoured to have BP as a foundation customer of our Woodfibre LNG project,” said Ratnesh Bedi, PO&G president in a joint news release from Pacific Oil and Gas, and Woodfibre LNG. “We look forward to providing BP with a consistent supply of flexible Canadian
LNG that can displace more carbon-intensive fuels.”

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Under the terms of the agreement, BP will receive 0.75 million tonnes per year of liquified natural gas over 15 years on a free on board basis, with first delivery expected in 2023.

In this instance, free on board means the customer takes title of the LNG once it gets on the ship, according to Woodfibre LNG.

“Woodfibre LNG is a tremendous opportunity for British Columbia and Canada to get ‘clean’ natural gas to growing markets in Asia,” said David Keane, president of Woodfibre LNG in
the release.

My Sea to Sky’s spokesperson called Woodfibre’s latest announcements “smoke and mirrors.”

“Woodfibre LNG still doesn’t have a real customer,” said Tracey Saxby, executive director of the Squamish-based environmental organization.

BP Gas Marketing Limited is not an end user of LNG, and would have to find buyers to sell Woodfibre LNG’s product, which is not guaranteed,” she said, adding LNG prices in Asia are still too low to be profitable at $4.8 per million British thermal units (mmBtu),”

BP Canada Energy Group ULC and Woodfire’s parent company also announced they are also working on an agreement for BP Canada to provide gas transportation and balancing services.

Balancing is part of managing a pipeline customer’s account with the pipeline, according to Woodfibre LNG’s spokesperson Rebecca Scott. In other words, when a customer’s account is balanced, the volume of the commodity that is put into the pipeline by the customer is equal to the volume of commodity taken out of the pipeline by the customer.

This would ensure “a reliable delivery of gas to the Woodfibre LNG export facility over the 15-year term,” according to the press release.

Scott said she couldn’t tell The Chief what other customers Woodfibre LNG has binding agreements with due to confidentiality, but she did say the company’s “LNG is pretty much fully subscribed.”

My Sea to Sky also opposes Woodfibre LNG and other proponents using the phrase “clean natural gas,” Saxby said.

“It’s time that we start calling ‘clean natural gas’ what it really is: a fracking climate disaster. Woodfibre LNG will increase fracking in northeast B.C. and lock us into 25-40 years of extreme fossil fuel pollution,” she said.

Scott said that independent studies show Woodfibre LNG will be the cleanest LNG export facility in the world.

 

***Updated July 3, 12:03 p.m.

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