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Enbridge to purchase 30 per cent stake in Woodfibre LNG in B.C

The Enbridge Inc. emblem on show on the firm’s annual assembly in Calgary, Thursday, Could 12, 2016. The Canadian Press/Jeff McIntoshJeff McIntosh / The Canadian Press

Enbridge Inc. ENB-T is investing US$1.5-billion for a 30-percent stake in British Columbia’s Woodfibre LNG terminal, hoping to bolster a long-delayed mission that wants deep-pocketed traders to assist export liquefied pure gasoline. For Asia.

Woodfibre goals to change into Canada’s second exporter of the gas behind Shell Plc-led LNG Canada, which has a terminal below development in Kitimat, B.C., with plans to start delivery to Asia in 2025.

Woodfibre will start development in September, 2023, and start exporting liquefied pure gasoline to Asia in 2027 from its industrial web site close to Squamish, BC, 65 kilometers north of Vancouver.

The Squamish-area LNG facility, to be constructed on the location of a pulp mill that closed in 2006, may have an annual export capability of two.1 million tonnes. LNG Canada, in contrast, is far bigger, with an preliminary export capability of 14 million tonnes a yr.

Enbridge mentioned Friday that woodfiber has lined up consumers for the gas in Asia, together with a 15-year dedication with London-based BP Fuel Advertising and marketing Ltd., which is able to contribute 70 p.c of the export terminal’s capability.

The Calgary-based vitality infrastructure firm will buy 30 p.c of WoodFiber, whereas Pacific Vitality Corp. Ltd. will personal the remaining 70 p.c curiosity. Pacific Vitality is a part of privately held RGE Pte. Ltd. of Singapore and managed by Indonesian businessman Sukanto Tanoto.

Pacific Vitality owns Pacific Canbrium Vitality Ltd., which is poised to ship its pure gasoline to Woodfiber by a pipeline system from northeastern B.C.

Development prices are estimated to whole US$5.1-billion, together with the Squamish-area export terminal and different bills, significantly associated to FortisBC’s proposed Eagle Mountain-Woodfiber gasoline pipeline.

Christine Kennedy, president of Woodfibre, mentioned LNG will play an necessary position as a transition gas globally to assist displace using thermal coal in electrical energy era. “It is at all times necessary to know and acknowledge that coal vegetation are being constructed world wide within the absence of LNG,” Ms. Kennedy mentioned in an interview.

However Tracey Saxby, government director of the climate-activist group My Sea to Sky, mentioned LNG shouldn’t be seen as a very good transition gas for the world. “Constructing LNG amenities is a multi-decade funding that may enhance fracking in northern B.C. and wean the province off fossil fuels for many years,” Ms. Saxby mentioned.

Brian Johnson, Enbridge’s vp of Canadian Fuel Transmission and Midstream, mentioned woodfiber emerged as an excellent match after Enbridge researched potential investments throughout Canada, together with the challenges of transporting pure gasoline from western Canada to the East Coast. “The battle is how do you get all that western Canadian gasoline in there? I imply the associated fee construction is totally different,” Mr. Johnson mentioned.

Proponents of two export proposals on the east coast, Pieridae Vitality Ltd. in Nova Scotia. of Goldboro LNG and Repsol SA’s Saint John LNG in New Brunswick are learning the economics of delivery LNG to Europe, however face pipeline bottlenecks in central Canada and New York. England.

Mr. Johnson mentioned LNG exported from BC to Asia would nonetheless not directly assist Europe because the continent seeks to wean off pure gasoline from Russia. “Essentially, it is a world market. So the extra you will get to Asia, the extra different items can go to Europe,” he mentioned, including that LNG exports to Asia might assist gas provides to Qatar and elsewhere to Europe.

Omar Mauzi, an analyst with the BC Heart for Innovation and Clear Vitality, mentioned Enbridge has a system of BC pipelines that may feed into FortisBC’s deliberate Eagle Mountain-Woodfiber gasoline pipeline.

“It is an easy manner for Enbridge to not take an excessive amount of threat on LNG on the West Coast,” he mentioned.

Mr Mauzi warned that development prices are skyrocketing on an array of vitality tasks, together with Woodfibre, which envisaged a $1.6-billion price ticket for the export terminal at a ground-breaking ceremony in 2016.

FortisBC’s plans embody operating two pipelines by 9 kilometers of tunnels below the Monmouth Ridge Mountain and Squelwil’m Squamish Estuary Wildlife Administration Areas. That tunnel and two pipelines alone are estimated to price $341 million. The determine doesn’t embody the expenditure associated to the development of the remaining 50 km pipeline route.

Earlier this yr, FortisBC notified the BC Environmental Evaluation Workplace of its new plans, which the regulator will evaluation in collaboration with the Squamish Nation.

“As a mission regulator, our position doesn’t change with the funding from Enbridge,” Squamish Nation spokesperson Wilson Williams mentioned in a press release. “The Squamish Nation will nonetheless maintain the mission to the strict requirements set out within the Influence Profit Settlement to make sure that our lands and our waters, in addition to our historic ties and cultural significance of the world, are revered.”

On Friday, Enbridge mentioned it posted a second-quarter revenue of $450-million, in contrast with about $1.4-billion in the identical interval in 2021.

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