B.C.’s First LNG Plant Gets Investment Green Light

This article originally appeared on The Climate Examiner at the Pacific Institute for Climate Solutions.

British Columbia’s first major liquefied natural gas project is set to go ahead with Woodfibre LNG’s announcement last week of funding to build a $1.6 billion processing and export plant in Squamish.

The project, which promises some 650 construction jobs and 100 permanent operating jobs to the small town with a population of 17,000, aims to begin exporting some 2.1 million tonnes of LNG annually to Asia from 2020.

The plant is much smaller than the highly controversial $11 billion Pacific NorthWest (PNW) LNG terminal planned near Prince Rupert that received conditional approval from the federal Liberal government in September and which would ship some ten times the amount of the Woodfibre project each year.

It is however the first of 20 proposed LNG export projects in British Columbia to be given company approval — a development that will bring much cheer to the provincial government which is facing an election next May and for whom a flourishing LNG industry is the centerpiece of its economic development plans.

The infant sector has been beset with a raft of bad news in the last year. In July Shell announced it was indefinitely postponing its LNG Canada project. And Petronas, the Malaysia-based developer of the PNW project, has delayed its final investment decision.

Atop the raft of negative business development announcements, globally the sector faces a supply glut that has driven prices down below levels sufficient to cover the cost of production in B.C.

B.C.’s natural gas development minister Rich Coleman has said that it is unlikely that another LNG project will enjoy final investment decisions from companies prior to next year’s provincial election, meaning Woodfibre is the provincial Liberals’ last bit of LNG good news before they move into campaign mode.

The company decision is also not very reflective of the mood amongst potential provincial LNG developers, as the decision was largely based on the need of Woodfibre’s Singapore-based parent company, Pacific Oil & Gas Limited, to supply its own gas-fired power plants rather than to sell to other purchasers on the open market.

Noticeable for their absence at the announcement were representatives of the Squamish First Nation. While they are not opposed to the project, it still has yet to clear their own independent environmental assessment, Chief Ian Campbell told the local press.

“We set out 25 conditions that must be met before we sign anything,” he said.

The provincial government is touting the environmental credentials of the project as processing will be powered by clean electricity instead of natural gas. The announcement was welcomed by private-sector clean energy power producers hopeful that they will be able to supply Woodfibre with their wares.

The Pembina Institute, an environmental think-tank, criticised the development, pointing out that while the Woodfibre project is smaller than other LNG schemes and even with electrification, it will still represent six percent of B.C.’s legislated 2050 emissions target, making the province’s mitigation goals that much harder to achieve.

Image: Christy Clark at the Woodfibre LNG announcement. Photo: Province of B.C. via Flickr (CC BY-NC-ND 2.0)

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