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Woodfibre LNG says deal progress shows 'appetite in Asia' for BC gas

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Woodfibre LNG says deal progress shows 'appetite in Asia' for BC gas

Lookingto build the first British Columbia LNG export facility, Woodfibre LNG Ltd. is inadvanced negotiations with a potential customer.

On May9, the company announced that a Singapore-based affiliate has signed a nonbindingheads of agreement with China's Guangzhou Gas Group Co. Ltd. for 1 million tonnesof LNG annually from Woodfibre's proposed facility for 25 years starting in 2020.

The preliminarydeal, which followed a September 2014 memorandum of understanding between the twocompanies, also could include an investment by Guangzhou Gas Group of up to 10%of Woodfibre LNG's equity.

"TheHoA with Guangzhou Gas Group shows there is an appetite in Asia for made in BC LNG,"Byng Giraud, Woodfibre LNG's vice president for corporate affairs, said in a statement."This preliminary agreement gets us one step closer to making the WoodfibreLNG project a reality."

The , which expects to start productionin 2020 with a capacity of 2.1 million tonnes per annum, received environmentalapproval from Canadian Minister of Environment and Climate Change Catherine McKennain March. In 2013, Canada's National Energy Board authorized Woodfibre LNG to exportroughly 0.33 Bcf/d of LNG for 25 years.

Whilesome analysts have been skeptical of Woodfibre LNG's ability to secure firm off-takeagreements and raise capital, the company is pressing on with its plans and recentlyawarded KBR Inc. a multi-phase contract for the project's front-end engineeringand design.

The progressfor Woodfibre LNG comes as once-promising B.C. projects like Petroliam Nasional Bhd.'s Pacific NorthWest LNG, Royal Dutch Shell plc's LNG Canada and AltaGasLtd.'s Douglas Channel LNG have announced delays and deferrals.

WoodfibreLNG is a subsidiary of the energy resources development firm Pacific Oil & GasLtd., part of the Singapore-based RGE group.