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Proposed LNG project to spend $625M in 2022

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Russell Hixson: While a final investment decision has not been made, officials say they're keen to see it completed in the coming years.

Woodfibre LNG, a proposed natural gas export facility being planned near Squamish, B.C., announced it plans to spend $625 million this year on site prep, engineering, design and other project-related activities.

Project officials stated they couldn’t give a full budget breakdown for proprietary reasons, but said the spending includes detailed engineering and design work, and $25 million will go towards cleaning up the project site which was a pulp and paper mill for 100 years.

The project team presented their spending plans to City of Squamish officials this month.

Some of this work includes removing concrete slabs, decommissioning a rail line, landfill closures and capping, and replacing dock facilities so crews can visit the site safely.

While a final investment decision has not been made for the project, officials stated they are keen to see it completed in the coming years.

“Woodfibre LNG will invest US$500 million in 2022 to move our project ahead,” said Christine Kennedy, Woodfibre LNG president. “While we have not yet issued our final Notice to Proceed, this confirmed investment is indicative of our intent to start pre-construction work this year and complete this critical low-emission energy project in 2027.”

So far, the team has spent more than $12 million on renovating the site.

They have removed more than 4,000 creosote piles, removed the deep-sea wharf and warehouse, recycled 12,500 cubic metres of old stockpiled concrete and its rebar.

The project team is also working on advancing its impact benefit agreement signed with the Squamish Nation. The agreement was signed in February 2019 and provides a range of funding, in-kind contributions, training and preferential employment opportunities for Indigenous people.

The project currently has three environmental approvals from the B.C. and Canadian governments and from the Squamish Nation. Its approval from the Squamish Nation was the first-ever environmental approval by an Indigenous people in the absence of a treaty.

The proposed export facility plans to source its natural gas from Pacific Canbriam Energy, a Canadian company with operations in northeastern B.C.

The project site is midway between Vancouver and Whistler.

The facility would have a storage capacity of 250,000 cubic metres and a production capacity of 2.1 million tonnes of LNG per year. It is expected the project could generate more than $80 million per year in tax revenue for the government.

Squamish officials also heard from FortisBC which announced plans to increase the size of its planned temporary workforce lodging site for the Eagle Mountain – Woodfibre Gas Pipeline (EGP) project.

The project is an expansion of the existing Fortis natural gas pipeline that runs between Coquitlam and Woodfibre to support the proposed facility. The 47 kilometre EGP project also includes construction of a new compressor station.

FortisBC is now proposing to increase the size of the temporary workforce lodge site from two hectares to seven hectares, addressing issues raised by the community around pressure on local housing, traffic congestion and community resources.

Previous proposals had anticipated that the majority of the workforce would be housed locally rather than at the lodge, said FortisBC.

Russell Hixson is the staff writer for the Journal of Commerce where he covers the construction industry.  Before that, he spent years in the U.S. as an investigative crime reporter. He lives in East Vancouver. Follow him on Twitter: @RussellReports.

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