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Canada approves Woodfibre LNG project for 40-year export license

Canada's National Energy Board has approved Woodfibre LNG for a 40-year export license, expanding the terms of the board's 2013 authorization for exports from the only British Columbia LNG export project that has yet to receive a final investment decision.

In an April 6 decision, the board determined the quantity of gas proposed for export from the Woodfibre LNG terminal "is surplus to Canadian needs." The license, which still must be signed by the prime minister and his cabinet, allows for export of the equivalent of 3.34 Bcf of natural gas a year.

"In aggregate, the LNG export licence applications submitted to the board to date represent a significant volume of LNG exports from Canada," the decision said. "However, all of these LNG ventures are competing for a limited global market and face numerous development and construction challenges .... the board believes that not all LNG export licenses issued by the board will be used or used to the full allowance."

The National Energy Board in 2013 approved Woodfibre to export about 0.33 Bcf/d worth of LNG for 25 years, but amendments to the board's authority allow it to now issue export licenses for up to 40 years. Woodfibre, which has proposed a LNG export facility near Squamish in British Columbia, applied for a 40-year export license in October 2016.

Woodfibre announced in November 2016 that parent company Pacific Oil & Gas Pty Ltd agreed to authorize the funds necessary for the project to proceed, making it the first LNG export project in British Columbia to get the green light from developers. Other ventures have stalled amid a supply glut and low oil and gas prices. Even with the funding decision, analysts have said the project, which requires additional permits from British Columbia's Oil and Gas Commission and the District of Squamish, still has a long road ahead.

The company in May 2016 said that a Singapore-based affiliate had signed a nonbinding heads of agreement with China's Guangzhou Gas Group Co. Ltd. for 1 million tonnes of per annum of LNG from Woodfibre's export terminal for 25 years starting in 2020.

The British Columbia Environmental Assessment Office approved the small liquefaction and export terminal, which would have a capacity of 2.1 mtpa of LNG, in October 2015. The approval came after work was suspended on the project in June 2015 so developers could further engage the Squamish Nation. Developers have said construction could begin in 2017.