BP Emerges as Lead Customer for Woodfibre LNG Despite Low-Carbon Messaging

The company proposing the Woodfibre liquefied natural gas (LNG) export project near Squamish, British Columbia, says it has struck a second sales contract with BP Gas Marketing Ltd. that allows it to account for more than 70% of future production from the plant.

Woodfibre’s 15-year contract to supply 750,000 tonnes of LNG per year doubles the initial commitment by BP Gas announced in 2019, The Canadian Press reports. It’s seen as an important step for the C$1.8-billion project as it faces a third-quarter decision by its owner, Pacific Oil & Gas Ltd., on whether to proceed.

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Woodfibre’s satisfied buyer, BP, would be the same colossal fossil that has been loudly touting its low-carbon credentials, declaring a five-year sprint to deploy 20 gigawatts of renewables and cutting its oil and gas exploration team from 700 staff to 100. None of that activity has stopped two major investment houses in London, UK from blacklisting BP for fear of stranded asset risk, or a UK critic from branding the US$70 billion in fossil investments embedded in the company’s carbon reduction plan a “suicide note to humanity”.

Woodfibre spokesperson Rebecca Scott told CP the company is trying to sign contracts for the remaining 29% of the 2.1-million-tonne annual capacity of the project, but doesn’t require those to go ahead with construction, which is expected to take about four years.

She said Woodfibre LNG is currently undergoing final engineering work while attempting to amend its environmental permit to allow floating accommodation for up to 600 workers during construction.

Scott said housing workers on barges is being considered after consultations with the community, as a partial solution to the high prices and low availability of housing on land near the site, a former pulp and paper mill located halfway between Vancouver and Whistler.

At one time, about 20 LNG terminals were proposed for the West Coast, but the $40-billion LNG Canada project headed by Shell Canada is the only one to reach the construction stage so far.

“Forward-looking companies like BP are turning to projects like ours for sustainable, stable gas that will supply a clean energy mix,” said Pacific Oil & Gas President Ratnesh Bedi in a release.

“We look forward to working with BPGM to deliver Canadian natural gas from one of the lowest carbon footprint LNG facilities in the world, and help advance the climate goals of growing economies as they phase away from coal, lower their emissions, and meet net-zero targets.”

[Bedi may have missed the memo from the International Energy Agency spotlighting methane emissions and gas flaring as the potential gaps in his messaging.—Ed.]

Work on the LNG project was delayed more than a year ago after the main engineering, procurement and construction contractor, McDermott, filed for Chapter 11 bankruptcy protection in the United States, and because of delays in procuring components in Asia during the pandemic. McDermott has since emerged from the court process to continue its contract with Woodfibre, Scott said.

This report by The Canadian Press was first published May 6, 2021.