Woodfibre LNG, backed by entrepreneur Sukanto Tanoto, has signed a letter of intent (LOI) with the province of British Columbia in the proposed Woodfibre liquefaction and export facility located near Squamish, 70 kilometers northeast of Vancouver. The LOI includes the commitment by the province to formalize its new two-tier tax on LNG export terminals by Nov 30 and Woodfibre LNG expects to complete a project-development agreement with the government by the end of the year.
"Woodfibre LNG hopes to be the first LNG export terminal in British Columbia," Imelda Tanoto, Woodfibre LNG's lead director, said in a statement.
With a capital cost of just US$2 billion, it will be able to export a relatively modest 2.1 million metric tons a year, with plans to start exporting gas by early 2017. This puts it ahead of the dozen or so competing projects, all located near the northern B.C. ports of Prince Rupert and Kitimat.
The proposed export facility will be located on a former pulp mill in an industrial area that has an established pipeline system, electricity and gas supplies, and a sheltered port, which will speed up its development.
Woodfibre LNG is owned by Pacific Oil & Gas (PO&G), a unit of the Singapore-based RGE Group, which was founded by Indonesian businessman Sukanto Tanoto. PO&G has a stake in an existing LNG receiving terminal near Shanghai and gas-powered electricity generation plants in Xiamen, in China's Fujian province, giving it a customer base for Canadian gas. China's LNG imports are running at record highs and the country expects to become one of the world's top LNG importers by 2020.
The Canadian government approved the long-term export license for Woodfibre LNG along with three other projects. Most other gas-export projects in North America are not expected to start shipments before 2020 and some face potential delays due to the need for environmental clearances and approval from local communities.
“Woodfibre is a smaller investment, but it is going to be, we think, on line faster,” Ms. Clark said in a phone interview. “So it will be sending its ships to Asia earlier. It could be one of the first liquefaction plants that send ships to Asia from British Columbia.”