For a premier facing a spring election with the prospect of having nothing to show for her promise of a liquefied natural gas industry, it must have been music to Christy Clark’s ears:
“This project is a go.”
So said Byng Giraud, vice president of corporate affairs for Woodfibre LNG at a press conference in Squamish Friday, November 4.
By that he meant that the company behind the project, Pacific Oil and Gas, has taken a final investment decision on the project, now estimated to cost $1.6 billion to build – slightly less than originally estimated.
“This is the first of the 20 projects that are in the pipeline somewhere to go forward, so far,” Clark said at a press conference at the industrial site in Squamish where the plant will be built. “And we are just delighted today to be able to say that LNG in British Columbia is finally becoming a reality.”
Giraud said the decision to take an FID now was based on the B.C. government’s announcement of special electricity rates for LNG projects that opt to use electric drive, as opposed to direct drive using natural gas itself for the chilling process that turns the gas into a liquid.
“In response to the province’s decision today to offer a competitive electricity drive rate for proponents that chose e-drive, I’m proud to announce that the board of directors of Woodfibre’s LNG parent company, Pacific Oil and Gas – part of the worldwide RGE Group – has authorized the funds necessary for the project to proceed,” Giraud said. “So this project, if I’m not clear, is a go.”
It’s not clear how the new rates for LNG projects using e-drive differ from standard power industrial rates. The B.C. government has not yet clarified how the rates differ from the standard industrial rates.
The Woodfibre LNG project is not of the magnitude of Petronas’ Pacific NorthWest LNG in Prince Rupert or Shell’s LNG Canada project in Kitimat. The 2.1 million tonnes of LNG it will produce annually is roughly one-ninth the size of those larger projects.
But it will be the first LNG plant to be built in B.C. that will export B.C. natural gas to Asia. (FortisBC has an LNG plant, but it serves a domestic market).
And though comparatively small, even a small LNG plant is a significant capital investment – equivalent to cost of building a new pulp mill.
The Woodfibre LNG project has the backing of the Squamish First Nation, which established 25 conditions for approval, all of which the company agreed to.
One of those conditions was moving to air cooling, rather than use seawater to vent the heat created in the chilling process.
Using electric drive, rather than natural gas for the liquefaction process, will reduce the plant’s potential greenhouse gas emissions.
Even so, there has been stiff opposition to the project, including from the District of Squamish, which has opposed its construction.
Opponents may even be resorting to vandalism. The day before Friday’s announcement, the community office used by Woodfibre LNG and FortisBC, which will supply the plant’s natural gas, was set on fire in what police have ruled to be arson.
By Nelson Bennett: email@example.com